McDonald’s Sues Former CEO to Recoup Millions in Severance Alleging of Improper Employee Relationships


By Nancy Bostic and Brian Clark, Gray Reed

via JDSupra - October 13, 2020


McDonald’s Corporation (McDonald’s) sued its former Chief Executive Officer, Steve Easterbrook, in August 2020 in an effort to force him to repay the $40 million in severance and equity awards provided to him when the company terminated his employment.  McDonald’s board of directors (Board) originally terminated Easterbrook’s employment without cause in November 2019, but subsequent internal investigations revealed that the Board would have had reason to terminate his employment for “Cause” based upon numerous instances of inappropriate sexual relationships with several McDonald’s employees in violation of McDonald’s policies. Termination for “Cause” would have disqualified Easterbrook from being entitled to receive severance under McDonald’s Corporation Officer Severance Plan (Severance Plan).


In the suit, McDonald’s claims that it was fraudulently induced by Easterbrook’s lies and concealment of evidence to enter into Separation Agreement and General Release (Separation Agreement) in which it was agreed that (i) Easterbrook’s employment was terminated without “Cause” and (ii) Easterbrook was entitled to his severance entitlements in McDonald’s Severance Plan.


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