McDonald’s reaches $105 million settlement with ex-CEO Easterbrook over alleged misconduct

McDonald’s Corp said on Thursday it had reached a settlement with former chief Steve Easterbrook, resolving a lawsuit in which the burger chain had claimed that he covered up and lied about his sexual relationships with employees.

As part of the settlement, Easterbrook has returned equity awards and cash worth over $105 million that he received as a severance package in 2019, McDonald’s said in a statement.

McDonald’s sued Easterbrook in August 2020, nine months after reaching a severance deal, claiming he never gave directors a complete picture of his relationships with employees.

Customers are seen through the windows of a McDonald’s store (top) in Tokyo, while others stand in line in front of cash registers, July 22, 2014. REUTERS/Yuya Shino/File Photo

The company said at the time it fired Easterbrook, it only knew of one, non-physical consensual relationship with an employee, but an anonymous tip after his ouster led to the discovery of dozens of sexually explicit photos of women, including three employees, that Easterbrook sent to his personal email from his company account.

In his response to the lawsuit, Easterbrook had claimed that McDonald’s had information about his relationships on its computer systems when it negotiated his severance package.

“Today’s resolution avoids a protracted court process and moves us beyond a chapter that belongs in our past,” McDonald’s Chairman Enrique Hernandez Jr said in a message to employees seen by Reuters.

McDonald’s said it would dismiss its action against Easterbrook with prejudice.

“During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a leader of the company. I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so,”  Easterbrook said in the same news statement provided by McDonald’s.

McDonald’s said in April it would require new training at its restaurants to fight harassment and discrimination after facing lawsuits accusing it of subjecting female employees at corporate-owned outlets to widespread sexual harassment.

(Reporting by Hilary Russ in New York and Uday Sampath in Bengaluru; Editing by Anil D’Silva)