A Delaware judge on Tuesday rejected former McDonald’s Corp. Chief Executive Stephen Easterbrook’s bid to dismiss a lawsuit by the fast-food chain seeking to recoup millions of dollars in severance pay because he allegedly covered up improper sexual relationships with employees.
McDonald’s knew that he had engaged in one, non-physical consensual relationship with an employee when the company agreed to a severance package estimated at $41.8 million in November 2019, both sides agreed.
The former CEO argued in his motion to dismiss that the restaurant company had evidence of his other sexual relationships with employees on its computer system so should have been aware of them. Vice Chancellor Joseph Slights of the Court of Chancery in Delaware, however, said McDonald’s was justified in relying on Easterbrook’s statements that he had only a single inappropriate relationship when the Chicago-based company ousted him.
A lawyer for Easterbrook did not immediately respond to requests for comment.
McDonald’s said it looked forward to proving Easterbrook’s misconduct.
“He violated the company’s policies, disrespected its values and abused the trust of his co-workers, the board, our franchisees and our shareholders,” it said in a statement.
McDonald’s sued Easterbrook in August, nine months after reaching the severance package, claiming he never gave directors a complete picture of his relationships with employees.
It said that after Easterbrook’s ouster, an anonymous tip led to the discovery of dozens of nude or sexually explicit photos of women, including three employees, that Easterbrook sent to his personal email account from his company account.
McDonald’s said Easterbrook deleted the emails shortly before his ouster, but they remained on a company server.
“This active concealment makes it at least reasonably conceivable the company had no way of knowing the full extent of Easterbrook’s misconduct,” Slights wrote.
(Reporting by Tom Hals in Wilmington, Delaware; additional reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)
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