McDonald's ex-CEO Steve Easterbrook hits back at food giant over lawsuit, calls it 'meritless and misleading'
Days after McDonald’s sued Steve Easterbrook on charges of hiding his office romances and regain $40 million that was given to him as compensation, the fast-food giant’s ousted CEO has hit back at his former employer saying it had all evidence of his office affairs at the time of negotiation of the separation agreement. The 53-year-old, who was sacked last year over a relationship with a junior colleague, has counter-accused McDonald’s of carrying out a shoddy probe when he exited.
Last week, explosive documents claimed that McDonald’s was unaware of the actual number of office romances that Easterbrook was involved in and the company sued him to regain the tens of millions that he took as a payoff. The food firm said it found “dozens of nude, partially nude or sexually explicit photographs and videos of various women”, including three staff members on its email servers that were not seen or searched for last year.
McDonald’s current president and CEO Chris Kempczinski said the company doesn’t tolerate behavior from its employees that does not reflect its values. Kempczinski replaced Easterbrook after his unceremonious exit.
Easterbrook's lawyers call lawsuit 'meritless, misleading'
The England-born and Chicago-based Easterbrook said McDonald’s was not thorough enough before it signed off his deal and has had the ‘new evidence’ all along. According to a report by Bloomberg, Easterbook’s lawyers said in a filing Delaware Chancery Court on Friday, August 14, “McDonald’s -- a sophisticated entity represented by numerous internal and external experts when it entered into the separation agreement -- is aware it cannot credibly allege a breach of contract claim.” Aiming to throw out the lawsuit, they said, “Instead, it improperly seeks to manufacture claims for a breach of fiduciary duty or fraud.” They called the lawsuit “meritless” and “misleading” which was filed in a “wrong forum.”
Easterbrook also said that the agreements covering the stock grants that have been targeted by McDonald’s must be heard in courts in Illinois where the company is based. He also accused the company of filing the lawsuit knowing he couldn’t respond immediately because the agreement featured a gag clause. His attorney Daniel Herr said, “McDonald's admits that the 'new' information it now relies upon is not new at all – rather, since the outset of the investigation it was in the company email account stored on the company’s servers.”
He added, “Prior to entering into the separation agreement, McDonald's conducted a thorough investigation involving 'independent outside counsel', who advised McDonald's independent directors, its board, and its general counsel. The separation agreement was therefore, and unequivocally, a well thought-out and bargained for exchange involving sophisticated parties.”
Easterbrook, who worked as McDonald’s CEO between March 2015 and November 2019, was once its golden boy as he turned the chain’s fortunes around and doubled the share price.
McDonald's allowed Easterbrook to strike back: Experts
Financial experts felt McDonald’s itself created the opportunity for Easterbrook to come back with the accusations he made. Dieter Waizenegger, executive director of CtW Investment which led a campaign against Easterbrook’s payoff, was quoted as saying by Financial Times: “It strikes me as very odd, and limited. The board really didn't do its job.”
Tim Hubbard from Mendoza College of Business said it was the first time that he saw something like this. “... for them to come back and revisit an issue that I believe most board members would wish would just go away.”