Executive says department head who was dismissed made women feel
uneasy Company looks at former head of department for possible
By Heather Haddon
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 31, 2020).
McDonald's Corp.'s former head of human resources is emerging as
a focus of the company's investigation into possible impropriety
under former Chief Executive Steve Easterbrook.
David Fairhurst, global chief people officer under Mr.
Easterbrook, was fired for cause last November after reportedly
making women at the company feel uncomfortable on numerous
occasions at business events, McDonald's current HR chief Heidi
Capozzi told employees during an online meeting last week, notes
from which were reviewed by The Wall Street Journal. The reason for
Mr. Fairhurst's termination hadn't been previously disclosed by
Mr. Easterbrook was fired last November after acknowledging a
consensual sexting relationship with an employee. McDonald's in
August sued Mr. Easterbrook to recover tens of millions of dollars
in severance after receiving an anonymous tip that the company said
led to evidence that he had sexual relationships with three other
The company has said the mens' dismissals weren't connected. The
company declined to comment on whether it is seeking to recoup
severance from Mr. Fairhurst. He said at the time of his departure
that he was moving on to another career challenge.
"The actions taken by former leadership aren't representative of
this company as a whole, nor are they representative of us as an HR
team," Ms. Capozzi, who became McDonald's global chief people
officer in April, said in response to a question about Mr.
Fairhurst's dismissal during the online meeting with employees last
week, according to the notes reviewed by the Journal.
Mr. Fairhurst didn't respond to requests for comment. "I have
decided the time has come for me to move on to my next career
challenge," he wrote in a LinkedIn post last fall.
Mr. Easterbrook, whose attorneys didn't respond to requests for
comment, said in a legal filing this month that the company had
information about his relationships with other employees when it
negotiated his severance.
McDonald's said last week that its continuing investigation into
Mr. Easterbrook's conduct is examining whether he covered up
improprieties by other employees, including personnel in the HR
department led by Mr. Fairhurst.
Messrs. Easterbrook and Fairhurst started working together at
McDonald's in the U.K. in 2005.
Soon after Mr. Easterbrook became CEO in 2015, he recruited Mr.
Fairhurst to Chicago as head of HR. The McDonald's board approved
his appointment to the expanded role as global chief people
officer, the company said in a release at the time.
"David is the leader we need to continue supporting the business
turnaround and driving our global people strategy," Mr. Easterbrook
said in a press release at the time of the promotion.
At McDonald's headquarters, Mr. Easterbrook charged Mr.
Fairhurst with transforming the company's work environment,
including tying employee performance more closely to business
results, said Dave Ulrich, a professor at the University of
Michigan's Ross School of Business who consulted with McDonald's
executives on the company's HR systems from 2016 to 2019.
"Steve said to David, 'You have to change the culture. That's
why you've been hired,'" Mr. Ulrich said.
Mr. Fairhurst and the department he rebuilt after many veterans
retired or took buyouts replaced a longstanding performance-review
system with "performance motivation," as he called it in interviews
at the time. Reviews were reduced to more casual conversations with
managers, and some former executives said this contributed to less
accountability and room for employee feedback.
Some former managers and employees told the Journal that they
felt HR leaders under Mr. Fairhurst ignored complaints about the
conduct of co-workers and executives they felt was inappropriate or
unfair. Some of those people told the Journal they feared
retaliation for reporting the conduct of co-workers and executives
Mr. Fairhurst also contributed to a party culture that developed
among some executives and managers during Mr. Easterbrook's tenure,
according to former employees, some of whom said they saw him
intoxicated at company events.
Mr. Fairhurst's conduct during a department holiday party in
2018 drew a complaint from an employee who said some staffers drank
heavily and that the HR chief and one of his subordinates made
inappropriate physical contact, people familiar with the incident
McDonald's legal counsel conducted an investigation that year,
those people said. An executive told employees who attended the
gathering that such excessive drinking was inappropriate and should
be reported if it happened again, the people familiar with the
The company fired Mr. Fairhurst after receiving another
complaint about his behavior around women at McDonald's, company
executives said. McDonald's code of conduct bars harassment or
intimidation. The code also bars relationships between employees
and direct or indirect reports. Mr. Easterbrook was fired for
violating that aspect of the company's code, McDonald's said at the
Ms. Capozzi said during the department meeting last week that
McDonald's has policies preventing retaliation against employees
who speak up and that any worker who doesn't feel that their
concerns are being addressed should contact her directly, according
to notes of the meeting viewed by the Journal.
Write to Heather Haddon at email@example.com
(END) Dow Jones Newswires
August 31, 2020 02:47 ET (06:47 GMT)
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