McDonald's accused former CEO Steve Easterbrook of engaging in sexual relationships with three employees and conspiring to keep photographic and video evidence of those relationships secret in a willful violation of the company's policies.
The fast-food giant said Monday that it had filed a lawsuit against Easterbrook, seeking to force him to pay damages or to disgorge him of compensation that he retained when the company's board fired him without cause in November.
The company said an internal investigation recently discovered "dozens of nude, partially nude or sexually explicit photographs and videos of various women, including photographs of these Company employees, that Easterbrook had sent as attachments to messages from his Company e-mail account to his personal e-mail account."
McDonald's said Easterbrook had "lied to the Company and the Board and destroyed information regarding" his behavior, which allegedly occurred in 2018 and 2019.
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Easterbrook also approved a stock grant worth hundreds of thousands of dollars to one of the women "shortly after their first sexual encounter and within days of their second," McDonald's alleged in the lawsuit, which was filed in a Delaware court.
Easterbrook received total compensation of $55.1 million from 2017 through 2019, according to the company's 2020 proxy statement.
It was not immediately clear Monday how to reach Easterbrook for comment.
Easterbrook, a citizen of the United Kingdom, was fired last year after he admitted to having had what McDonald's called a "non-physical, consensual relationship involving texting and video calls" with an employee. That person was not one of the three women with whom Easterbrook allegedly had sexual relationships detailed in the lawsuit.
The company said Monday that it had dismissed Easterbrook without cause and with a severance package because it did not have evidence of the other behavior at the time. But the internal investigation that has been ongoing since his departure revealed details that, McDonald's said, would have led the company to fire him with cause and without a severance package, had it known all along.
"McDonald’s would have been well served by doing a more thorough investigation" in the first place, said Tim Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business, in an email interview. "I think, though, the board had an expectation of honesty from Mr. Easterbrook given the large sum of money that was going to be paid out."
The alleged photographic and video evidence of Easterbrook's sexual relationships had been deleted from his company-issued phone by the time he handed it over to McDonald's upon his departure, the company said.
But the emails containing the evidence he allegedly sent from his work account to his personal account were still housed on the company's server, according to the lawsuit.
Hubbard said the Easterbrook case should serve as an example for other corporations of how they need to conduct "much more thorough investigations into wrongdoing."
"This should start as early as possible – even in the rumor stage," he said.
He also said companies should structure severance packages to punish bad behavior.
"Right now, we see company after company sending their corrupt and dishonest CEOs away with millions of dollars," he said. "We set a terrible example for other executives that this behavior is OK. It’s not. Compensating CEOs as they walk out the door is the worst thing we can do."
This article originally appeared on USA TODAY: Ex-McDonald's CEO sued over alleged sexual relationships, nude videos