Former CEO fires back at McDonald's in legal row

NEW YORK • McDonald's Corp's former chief executive officer Steve Easterbrook fired back at his former company for suing to claw back tens of millions of dollars in compensation, denying company claims that he covered up sexual relationships with subordinates.

McDonald's officials claimed that after firing Mr Easterbrook last year, they found new information that showed the former top executive "concealed evidence and lied about his wrongdoing". Mr Easterbrook says McDonald's had the information about his relationships with employees when it negotiated his separation agreement.

"McDonald's - a sophisticated entity represented by numerous internal and external experts when it entered into the separation agreement - is aware it cannot credibly allege a breach of contract claim," said Mr Easterbrook's lawyers last Friday in a court filing, seeking to have the lawsuit thrown out. "Instead, it improperly seeks to manufacture claims for a breach of fiduciary duty or fraud."

It is the latest salvo in a legal battle over Mr Easterbrook's ouster, which was covered by the severance deal allowing him to keep stock awards worth over US$37 million (S$51 million), plus US$675,000 in severance and health insurance benefits.

"McDonald's stands by its complaint, both the factual assertions and the court in which it was filed," the company said.

Mr Easterbrook also claims agreements covering stock grants targeted by the company must be heard in Illinois courts, where McDonald's is based.

He also accused the chain of filing the suit knowing he could not immediately respond because of a gag clause in the agreement. "McDonald's Corporation filed a meritless - and misleading - lawsuit in the wrong forum," his lawyers said.

While McDonald's is based in Illinois, it is incorporated in Delaware. The chancery court in the state is the premier venue for resolving high-profile corporate disputes.

In return for his severance package, Mr Easterbrook agreed to a two-year non-compete clause specifying over 40 companies that he could not join. He was also required to write a letter "to employees acknowledging that he made a mistake", said the filing.

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