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McDonald's sues former boss Steve Easterbrook over alleged relationships with colleagues

Steve Easterbrook 
Steve Easterbrook

When Steve Easterbrook, the British corporate star who turned around McDonald's, was fired last year the American food giant said it was because he had displayed "poor judgment" having a consensual relationship with a junior employee.

Mr Easterbook admitted making a "mistake," and people close to him said he had been a "naughty boy". But, amid the high-profile MeToo saga, some felt losing his high-powered job might have been harsh.

Now, McDonald's has gone public with accusations that its former chief executive in fact had three additional, physical sexual relationships with members of staff in the space of a year.

He is accused of then lying about it to company investigators, and deleting evidence so that he could leave with over $40 million (£35 million) in severance pay.

The purported evidence, recovered by investigators, included dozens of sexually explicit photographs and videos of the women involved, which Mr Easterbook was alleged to have sent from his work email account to his personal one.

In addition, he was alleged to have approved a grant of shares, worth hundreds of thousands of dollars, to one female employee while they were having a sexual relationship.

McDonald's is now suing its former boss for breach of fiduciary duty and fraud. It is demanding its $40 million back.

Steve Easterbrook
Steve Easterbrook

A 20-page document filed in a court in Delaware accused Mr Easterbrook, 53, of violating the fast food company's "wholesome and family-oriented" image.

It is a stunning turn of events for Watford-born Mr Easterbook. He attended Watford Grammar School and Durham University, and joined McDonald’s as a branch manager in 1992, working his way up.

In 2015 he became chief executive when the company's share of the fast-food market was in decline.

He introduced touch-screen ordering and all-day breakfasts, and McDonald's share price roughly doubled with him at the helm.

At about the time he moved to the US in 2015 Mr Eastebrook and his wife Susie, a part-time estate agent with whom he has three daughters, divorced.

Neighbours said one of the reasons had been that she did not want to go to America, and wanted their daughters educated in the UK.

In suing its former chief executive McDonald's said it learned, in October last year, of an allegation that he had engaged in an "inappropriate personal relationship" with a woman referred to as "Employee 1".

At the time the woman confirmed it, saying it was "entirely consensual" and consisted of text messages and video calls over a few weeks, but "never included a physical relationship."

Mr Easterbook was interviewed and gave a similar account, and his mobile phone was searched.

The company claims that he was also asked if he had ever had a sexual relationship with any company employee, and he denied doing so.

On November 1, the McDonald’s board decided to fire him but agreed a separation package.

Mr Easterbrook was paid over $40 million including shares and 26 weeks pay. His annual earnings had been over $15 million.

According to the court documents the company received another anonymous tip off last month alleging that a McDonald’s staff member - "Employee 2" - had a physical sexual relationship with Mr Easterbrook while he was chief executive.

An internal investigation discovered "photographic evidence that Easterbrook had engaged in a physical sexual relationship not only with Employee-2, but also with two other company employees in the year before his termination," it was alleged.

The complaint added: "That evidence consisted of dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees.

"Easterbook had sent the images as attachments to messages from his company e-mail account to his personal e-mail account."

McDonald's said it was "undisputable evidence" that Mr Easterbrook had repeatedly violated a company ban on any kind of intimate relationship between "employees in a direct or indirect reporting relationship".

Date stamps on photographs of "Employee 2" also showed he had approved shares worth hundreds of thousands of dollars for her "shortly after their first sexual encounter and within days of their second," it was alleged.

According to McDonald's the three alleged relationships were not discovered in the initial investigation last year because only emails on Mr Easterbrook's mobile phone were searched. The complaint said: "Easterbrook, with the intention of concealing their existence from the company, had deleted them from his phone."

However, the emails still showed up on his company e-mail account stored on McDonald’s servers."

McDonald's claimed Mr Easterbrook had been "knowingly untruthful," that he had "concealed evidence and lied about his wrongdoing," and "destroyed information".

The company said it would never have agreed to the separation terms had it known. There was no immediate comment from Mr Easterbrook.