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McDonald's slams

McDonald’s slams ex-CEO as ‘morally bankrupt’ after he asks for dismissal of chain’s lawsuit against him – CNBC

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.”  

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.”

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accuses McDonald's

McDonald’s accuses ousted CEO Steve Easterbrook of hiding sexual relationships with employees – CBS News

When McDonald’s canned Stephen Easterbrook as CEO in 2019 for having what he and the company described as a consensual relationship with an employee, the parting was relatively straightforward — and highly lucrative for the ousted CEO, who walked away with a compensation package reportedly worth more than $40 million. Eight months later, the fast-food giant is suing its former chief executive to recoup the money, claiming he had sexual relationships with multiple employees and tried to cover them up.

In a lawsuit filed Monday in Delaware, McDonald’s accuses Easterbrook of having relationships with an additional three employees in the year before his termination, alleging he “concealed evidence and lied about his wrongdoing.” The suit further alleges that Easterbrook approved an extraordinary stock grant worth hundreds of thousands of dollars for one of the workers.

The company’s case against Easterbrook includes dozens of naked or explicit photographs and videos of different women — including some McDonald’s employees — that Easterbrook allegedly sent as attachments to his personal email account from his work account in late 2018 or early 2019.

Lawyers representing Easterbrook didn’t immediately respond to emails requesting comment.

Stephen Easterbrook
Former McDonald’s CEO Stephen Easterbrook unveils the company’s new corporate headquarters during a grand opening ceremony on June 4, 2018, in Chicago, Illinois.

Getty


McDonald’s contends Easterbrook’s exit should not have included severance pay because the company had reason to fire him for cause and he deceived company investigators, according to the complaint.

An employee recently came forward with new information regarding Easterbrook’s conduct, which “deviated from our values in different and far more extensive ways than we were aware when he left,” wrote Easterbrook’s replacement, Chris Kempczinski, in a note to employees. “This new information makes it clear that he lied and destroyed evidence regarding inappropriate personal behavior and should not have retained the contractual compensation he did upon his exit.” 

At the time, Easterbrook told McDonald’s employees in an email that he agreed with the board that it was time for him to move on. He also offered congratulations to Kempczinski on his promotion, saying: “I know you will support him as you have supported me — he’s lucky to have a team of your caliber.”


McDonald’s CEO on new values, social change

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McDonald’s executive severance policy for executives states that an employee’s termination will be defined as “for cause” when there is a “material violation of McDonald’s standards of business conduct or other employment policies.”

In November, McDonald’s board of directors opted to classify Easterbrook’s termination as “without cause.” That entitled him to $675,000 in severance and health insurance benefits and stock awards valued in the tens of millions.

Until his exit, Easterbrook was highly regarded for introducing technological innovations such as touch-screen ordering, with McDonald’s shares roughly doubling in value during his more than four years at the helm. The England native had previously worked at the company for almost two decades.

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Chipotle McDonald's

McDonald’s and Chipotle will require customers to wear masks as Covid-19 cases surge – CNN

New York (CNN Business)McDonald’s and Chipotle announced they would soon require customers to wear masks or other face coverings as cases of Covid-19 surge across the United States.

McDonald’s announced Friday that starting August 1, customers who walk into its restaurants will have to wear face coverings.
Chipotle (CMG)‘s mask requirement was effective Friday, and signage has been put up at restaurants to let people know about the policy, a spokesperson told CNN Business. During a call this week discussing the company’s second-quarter financial results, Chipotle CEO Brian Niccol said that many customers already wear masks and take other safety measures.
The moves follow similar policies from major restaurant chains and retailers, including Starbuck, (SBUX) Panera, Walmart, (WMT)and Kroger. (KR)
McDonald’s said that about 80% of its restaurants are in areas that already require face coverings. But “it’s important we protect the safety of all employees and customers,” the company said in a statement.
It’s also anticipating that some customers might not like the new rule.
“In those situations where a customer declines to wear a face covering, we’ll put in place additional procedures to take care of them in a friendly, expedited way,” McDonald’s said, adding that that employees will be trained “to ensure they are prepared to address this new policy in a friendly and positive way.” Customers who enter a McDonald’s location without a mask will be offered one by an employee. If they refuse to wear it, they’ll be asked to stand at a designated spot, away from other customers, where they’ll receive their orders.
Starbucks also advised its staff on how to handle customers who refuse to wear a face covering.
The coffee chain sent around tips and talking points to staff before its rule took effect. Employees were advised to encourage customers who don’t want to wear masks to wait outside or in their cars for their orders, and offer them a glass of water while they wait. They could also offer a free drink the next time the customer comes in, as long as they wear a mask. Employees were encouraged to offer masks to customers who don’t have them.
McDonald’s (MCD) also said Friday that it is continuing its pause on reopening dining rooms for another 30 days.
— CNN Business’ Nathaniel Meyersohn contributed to this report.

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