McDonald’s CEO fired after found being in relationship with employee

McDonald's CEO, fired, Steve Easterbrook, relationship with employee, violation of company policy, email, separation package, Chris Kempczinski, next CEO, McDonald's shares, dropped, Carl Tobias, #MeToo, sexual harassment charges, workplace harassment charges
McDonald's would not provide details about the employee with whom CEO Steve Easterbrook was involved, and an attorney for Easterbrook declined to answer questions. Representational image: iStock.

McDonald’s chief executive officer (CEO) Steve Easterbrook has been fired from the company after violating company policy by engaging in a consensual relationship with an employee, the corporation said.

The fast food giant on Sunday (November 3) said that Easterbrook demonstrated poor judgment, and that McDonald’s forbids managers from having romantic relationships with direct or indirect subordinates.

In an email to the employees, Easterbrook acknowledged that he had a relationship with an employee and said that it was a mistake. “Given the values of the company, I agree with the board that it is time for me to move on,” Easterbrook said in the email.

McDonald’s would not provide details about the employee with whom Easterbrook was involved, and an attorney for Easterbrook refused to answer questions.

McDonald’s board of directors voted on Easterbrook’s departure on Friday (November 2) after conducting a thorough review. Details of Easterbrook’s separation package will be released on Monday (November 4) in a federal filing, according to a company spokesman.

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He will also be leaving the company’s board. Easterbrook was CEO since 2015.

The board of directors named Chris Kempczinski — who recently served as president of McDonald’s USA — its new president and CEO.

Kempczinski joined McDonald’s in 2015. “He was responsible for approximately 14,000 McDonald’s restaurants in the US. He was instrumental in the development of McDonald’s strategic plan and oversaw the most comprehensive transformation of the U.S. business in McDonald’s history,” said Enrique Hernandez, chairman of the McDonald’s board, in a statement.

Kempczinski described Easterbrook as a mentor.

McDonald’s decision to act may be a sign of progress on workplace issues that have come to light in the #MeToo era, said Carl Tobias, a law professor at the University of Richmond. “Other companies don’t always act on that kind of information or fire their CEO for that, and so it seems like they trying to enforce a pretty strict policy in this situation,” Tobias claimed.

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Among other challenges at its restaurants, McDonald’s has faced numerous workplace harassment charges. In May, McDonald’s said that it was enhancing training and offering a new hotline for workers after a labour group filed dozens of sexual harassment charges against the company.

Meanwhile, McDonald’s reported a 2% drop in net income for the third quarter two weeks ago as it spent heavily on store remodeling and expanded delivery service. The company’s share price has dropped 7.5% since, though it’s still up 9.2% for the year.

The burger chain also has been plagued by declining restaurant traffic.

The company said in a news release that the leadership transition was unrelated to the company’s operational or financial performance.