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What should we take away from the sudden departure of Steve Easterbook from McDonald’s?

The departure of McDonald’s CEO Steve Easterbrook at the weekend for having a consensual relationship with another employee created headlines for numerous reasons. Not least because of the $675,000 severance payment, but because he was the company’s Chief Executive and don’t things like that get conveniently swept under the carpet? No longer it seems.

The restaurant industry has a very poor reputation when it comes to claims for sexual harassment in the workplace. Consensual or not, Easterbrook’s relationship, coming as it does in the current ‘Me Too’ climate, was always likely to be a PR problem - and that’s why McDonald’s acted swiftly.

Another fall-out from the episode, albeit less prominently reported, was that McDonald’s Global Chief People Officer David Fairhurst would also leave, although no reasons were given. It doesn’t need too many dots to be joined-up to surmise that someone else was aware of the relationship and did not report it.

Easterbrook was divorced and had been in post since 2015.

Remove the high profile nature of this particular case and the outcome was probably inevitable once the facts became known. Easterbrook was in contravention of McDonald’s employment rules. “He violated company policy and demonstrated poor judgement involving a recent consensual relationship with an employee” according to the company’s statement.

The McDonald’s board were compelled to take action to enforce the policy and uphold the values of the business. Easterbrook himself, in a brief statement, said he agreed with the board’s decision.

The exact wording of the McDonald’s ‘relationships at work’ policy is unknown. However research in June 2018 from American HR firm, Challenger Gray & Christmas reported just over 75% of employers polled forbid relationships between an employee and someone who is in their management chain. Some go further and ban relationships of any kind.

One can have a separate debate about the extent to which employers should have power over the personal lives of their staff. That is not really relevant here, but the workplace is the second most common way to meet a significant other, after an introduction by a friend.

Whatever an employer’s policies are regarding standards of behaviour, workers are expected to understand them and abide by them once they have taken the job. Regarding this case it appears:

  • the more senior an employee, the more important it is that behaviour aligns with corporate standards and brand values; and
  • if an employee doesn’t disclose something that they become aware of that contravenes a key policy, then they may be guilty of misconduct by association.

Both these are perhaps refreshing stances.   

In the separation agreement, which is in the public domain, Easterbrook also has a two year non-compete clause, covering over 30 named companies in the restaurant business. Before you feel too sorry for the impact of the restrictions, Easterbrook has been allowed to keep his stock awards, estimated to be worth, $37 million according to Bloomberg.        

If you are an employer and you would like some advice relating to employee contracts, or you are an employee that would like advice, contact the Employment Team at Downs Solicitors for more information.

Posted on 07/11/2019 by David Seals

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