'When McDonald's investigated, its CEO lied': McDonald's slams ex-CEO's motion to dismiss a case alleging he covered up sexual relationships with employees
McDonald'sslammed ex-CEO Steve Easterbrook's motion to dismiss the fast-food giant's lawsuit against Easterbrook in a filing on Monday.
- "When McDonald's investigated, Steve Easterbrook lied," McDonald's said in a statement.
- "He violated the Company's policies, disrespected its values, and abused the trust of his co-workers, the Board, our franchisees, and our shareholders."
- McDonald's is suing Easterbrook, alleging that the former CEO attempted to destroy evidence of sexual relationships with three employees when he was leading the company.
- Easterbrook's attorney said in a counter-filing earlier in August that McDonald's had access to evidence of Easterbrook's sexual relationships when it terminated the CEO in November 2019.
McDonald's slammed a motion to dismiss its case against ex-CEO Steve Easterbrook in a filing on Monday.
The answering brief to the motion to dismiss McDonald's complaint begins with the line: "When McDonald's investigated, its CEO lied." The fast-food giant is suing Easterbrook, claiming the former CEO covered up evidence of sexual relationships with employees.
McDonald's argues in Monday's filing that Easterbrook "breached his fiduciary duties of candor and loyalty and fraudulently obtained a termination 'without cause.'"
The "without cause" nature of his departure in November 2019 meant that Easterbrook could receive a substantial severance package, which McDonald's is now trying to reclaim.
The Monday filing comes after Easterbrook's attorney filed a motion to dismiss McDonald's lawsuit against him.
Easterbrook argued that McDonald's had access to the alleged evidence of misconduct when it agreed his severance in November 2019.
McDonald's argues in Monday's filing that the fact that investigators did not originally uncover evidence of Easterbrook's sexual relationships with employees is no basis for a motion to dismiss.
"After discovery, on a full factual record, Easterbrook can attempt to argue that McDonald's should have investigated differently and uncovered his deceit sooner," the filing reads.
On August 10, McDonald's filed a complaint saying that the company found "indisputable evidence" of Easterbrook's sexual relationships with three employees, in the form of dozens of nude and sexually explicit photos taken in late 2018 and early 2019.
According to McDonald's, the company discovered these photos as part of an investigation into the ex-CEO in July, as attachments to an email Easterbrook sent himself from his company email.
The complaint said that Easterbrook attempted to cover up the relationships and delete the email in question from his phone when he was being investigated for another relationship with an employee.
Following the first investigation, Easterbrook was terminated without cause. But the agreement collapsed this summer after McDonald's received an anonymous tip regarding Easterbrook's relationships with employees.
It then sued the CEO to claw back his severance benefits, which executive compensation tracking firm Equilar estimates could be worth $57.3 million.
Easterbrook's attorney called McDonald's lawsuit 'meritless' and 'misleading'
Easterbrook's attorney said in a counter-filing on August 14 that McDonald's "filed a meritless – and misleading – lawsuit in the wrong forum."
McDonald's filed the case in Delaware instead of Illinois, where McDonald's is based and where Easterbrook's attorney argued the complaint should have been filed.
Further, Easterbrook's motion to dismiss the complaint argues that McDonald's already had access to the nude photos — found on the company's servers — when it conducted its first investigation and made its separation agreement with Easterbrook.
According to McDonald's filing on Monday, any lawsuits related to breaches of fiduciary duty by company's directors or executives need to be filed in Delaware, according to the company's bylaws.
"When McDonald's investigated, Steve Easterbrook lied," McDonald's said in a statement to Business Insider.
"He violated the Company's policies, disrespected its values, and abused the trust of his co-workers, the Board, our franchisees, and our shareholders. His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law."
Easterbrook's attorney did not immediately respond to Business Insider's request for comment.
If you are a current or former McDonald's employee with a story to share, email firstname.lastname@example.org.
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