By Heather Haddon and Suzanne Vranica
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 (September 1, 2020).
McDonald's Corp. pushed back at former Chief Executive Steve
Easterbrook's attempts to dismiss its lawsuit seeking to claw back
his severance, saying that his attorney's questions about the
thoroughness of its investigation into his affairs should be
addressed in court.
The burger company fired Mr. Easterbrook without cause in
November after he acknowledged having a consensual relationship
with an employee. The company said in August that an investigation
stemming from a tip found evidence that Mr. Easterbrook lied to
investigators and its board to cover up additional sexual
relationships with employees to secure a multimillion-dollar
"When McDonald's investigated, Steve Easterbrook lied," the
company said in a statement Monday. "He violated the company's
policies, disrespected its values, and abused the trust of his
co-workers, the board, our franchisees, and our shareholders.
Mr. Easterbrook's attorneys didn't respond to requests for
McDonald's has said its continuing investigation into Mr.
Easterbrook's conduct is examining whether he covered up
improprieties by other employees alongside allegations of potential
misconduct within the human-resources department.
Some former managers have told The Wall Street Journal they felt
HR leaders under Mr. Easterbrook ignored complaints about the
conduct of co-workers and executives. Some of those people said
they feared retaliation for reporting such conduct to HR.
McDonald's has said its investigators uncovered email messages
with attachments that contained dozens of nude and sexually
explicit photos and videos of Mr. Easterbrook with company
employees and other women between late 2018 and early 2019. Mr.
Easterbrook allegedly destroyed that evidence on his electronic
devices, and the company later found it on its computer
Responding to the company's suit, Daniel Herr, a Delaware-based
attorney for Mr. Easterbrook, said in a filing two weeks ago that
McDonald's had Mr. Easterbrook's email account stored on company
servers when it first investigated his conduct last October.
Mr. Herr wrote in the filing that McDonald's had filed a
meritless and misleading lawsuit in the wrong court venue. Mr. Herr
didn't comment directly on Mr. Easterbrook's alleged sexual
relationships within the company.
"This brazen attempt at table-turning has no merit," McDonald's
wrote in a filing in Delaware Court of Chancery. The company said
the Delaware court was the proper venue for the case, according to
its corporate bylaws.
McDonald's said in the filing that the evidence would have been
"buried somewhere in the tens of thousands of his emails" in the
company's servers, and that criticism of the thoroughness of its
investigation doesn't hold up.
McDonald's fired its former HR chief, David Fairhurst, shortly
after Mr. Easterbrook's termination for reportedly making women at
the company uncomfortable on numerous occasions. Mr. Fairhurst said
at the time that he left the company to pursue other career
The company has said Mr. Fairhurst's and Mr. Easterbrook's
dismissals weren't connected. Mr. Fairhurst didn't respond to
requests for comment.
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
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.
Some former managers and employees said they felt left out of
advancement opportunities in departments, including HR, because
they weren't part of an after-hours social circle among HR
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 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 prohibits harassment or
intimidation. The code also disallows 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
McDonald's hired a new global chief people officer, Heidi
Capozzi, in April from Boeing Co. She is reviewing HR processes and
policies put in place under Messrs. Fairhurst and Easterbrook,
company executives said, and plans to add new HR positions and
procedures such as evaluations for senior executives with
subordinates' feedback. Company executives said she is reviewing
the ways concerns are raised and investigated.
In an online meeting with employees in August, Ms. Capozzi
encouraged them to raise concerns about questionable behavior,
according to notes of the meeting reviewed by the Journal.
Write to Heather Haddon at email@example.com and Suzanne
Vranica at firstname.lastname@example.org
(END) Dow Jones Newswires
September 01, 2020 02:47 ET (06:47 GMT)
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