Restaurants

McDonald's slams ex-CEO as 'morally bankrupt' after he asks for dismissal of chain's lawsuit against him

Key Points
  • McDonald's responded to former CEO Steve Easterbrook's request to dismiss the lawsuit against him.
  • The company sued Easterbrook to recoup his severance package after saying it discovered that he had sexual relationships with three additional women while at McDonald's.
  • In a statement to CNBC, the company said: "His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law." 
Steve Easterbrook, then-chief executive officer of McDonald's Corp., speaks during the opening of the company's new headquarters in Chicago, Illinois, on Monday, June 4, 2018.
Joshua Lott | Bloomberg | Getty Images

McDonald's slammed former CEO Steve Easterbrook in a new legal filing on Monday, arguing that he should have to defend his conduct in court. 

More than two weeks ago, Easterbrook asked the Delaware court to dismiss the case filed by McDonald's, which is suing him to recoup his severance package after saying it discovered that he had sexual relationships with three additional women while at McDonald's.

The board ousted Easterbrook in November and awarded him a severance package with an estimated value of tens of millions of dollars after he acknowledged an affair with an employee but denied additional sexual relationships. The separation agreement also included some benefits for McDonald's, like noncompete and nondisparagement clauses, which Easterbrook's attorney pointed out in his request for dismissal of the case.

"Easterbrook's suggestion that, his lies notwithstanding, McDonald's got a good enough deal by ridding itself of him has no legal merit," McDonald's responded in the filing. 

In arguing for a dismissal, Easterbrook claimed that McDonald's had the "new" information about his alleged relationships the entire time. Easterbrook allegedly deleted emails containing evidence of those relationships on his phone, yet they remained on the company's servers, McDonald's said.

McDonald's said in its filing that Easterbrook's argument boils down to "he cannot be liable because, as a matter of law, he did not hide his misconduct well enough."  

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Easterbrook's attorney did not respond to a request for comment from CNBC.

"When McDonald's investigated, Steve Easterbrook lied. 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 said in a statement to CNBC. "His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law."

Beyond Easterbrook's behavior, the board is also investigating the company's human-resources department and its leadership, a source familiar with the matter told CNBC.

Heidi Capozzi, McDonald's global people officer as of April and a former Boeing executive, told employees that they should come forward and share if they've witnessed conduct that doesn't abide by their policies, according to notes of a recent townhall meeting viewed by CNBC.

Capozzi told employees that her predecessor David Fairhurst reportedly engaged in behavior repeatedly at business events that made female employees uncomfortable and was fired for cause, based on an internal investigation. The details of the townhall were first reported by the Wall Street Journal.

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