Last November, McDonald’s fired CEO Steve Easterbrook after discovering he had engaged in a consensual, nonphysical relationship with an unidentified employee. Easterbrook lost his job for violating company policies and showing poor judgment, but he was allowed to walk away with a nearly $42 million severance package because he hadn’t lied about his actions or done anything illegal.
Now McDonald’s has more to say about Easterbrook’s departure. The fast-food giant is suing Easterbrook to recoup the money, alleging that a deeper investigation determined he covered up other inappropriate activities. While the known relationship had involved texts and video calls, McDonald’s claims Easterbrook had three other physical relationships with employees, one of whom he granted generous stock options. Easterbrook tried to erase evidence by deleting explicit photos and videos of various women from his work email, McDonald’s says, but he couldn’t scrub the company’s computer servers.
The technical description for McDonald’s aggressive posture is that it wants to rip up the separation agreement and retroactively terminate Easterbrook “for cause,” meaning his conduct constituted dishonesty, fraud, illegality or moral turpitude. The cultural backdrop is more important than the legal: McDonald’s is willing to go after an already disgraced former CEO, and turn embarrassing attention back on itself, to make the larger point that bosses will be held accountable for bad conduct. “McDonald’s does not tolerate behavior from any employee that does not reflect our values,” the current CEO, Chris Kempczinski, said in a companywide statement.
McDonald’s is doing the right thing, with much of the credit going to the #MeToo movement, which is teaching corporate America long-overdue lessons about the ethics and responsibilities of workplace management. For generations, it’s fair to generalize, bosses could get away with sexual harassment and other bad behavior – or overlook misconduct by others – because victims were reluctant to confront those who sign the paychecks.
That power imbalance will always exist, but #MeToo is changing the equation. One of the worst offenders, and first held accountable in the new era, was Hollywood producer Harvey Weinstein, now serving a 23-year prison sentence for rape and sexual assault. It’s worth keeping in mind that Weinstein had evaded responsibility for decades.
With #MeToo, there’s no longer denying that some bosses are manipulative people, and employees have a right to be treated fairly, respectfully – and have any complaints taken seriously. While companies have always worried about their reputations, they often figured in the past that keeping quiet about allegations was the easiest course of action. Letting a dismissed executive slip away was good enough. Thankfully, the opposite is now becoming the norm: Being as transparent as possible about scandals is an important aspect of demonstrating zero tolerance of misbehavior.
In the case of McDonald’s, the company can still be faulted for stuffing cash and stock options into Easterbrook’s pockets as it shoved him out the door. A more robust investigation at the time might have uncovered other alleged transgressions. McDonald’s acknowledges that given what it knew initially, its board of directors “concluded that it would be in McDonald’s best interest if Easterbrook’s separation was accomplished with as little disruption as possible.”
And that might have been the end of matters, until the company received an anonymous report this summer alleging that Easterbrook had a sexual relationship with another employee. If the allegations are proved, he should be forced to forfeit his severance.
As CEO, Easterbrook was the boss of every McDonald’s employee, which means they were all answerable to him. It wouldn’t matter if he could justify a relationship as consensual. The power imbalance renders any relationship susceptible to abuse, including the perception of providing unfair benefits to some.
Strong policies governing employee behavior are important. But they are effective only if they are enforced. That’s the message of #MeToo, and the one McDonald’s lawsuit reinforces.
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