McDonald's fires CEO Steve Easterbrook over 'consensual relationship' with employee

Mr Steve Easterbrook was a key architect of the global fast-food giant's push into electronic ordering and delivery. McDonald's does not allow the CEO to have a relationship with anyone in the company. PHOTO: MCDONALD'S.COM

NEW YORK (BLOOMBERG/WASHINGTON POST) - McDonald's Corp fired chief executive officer Steve Easterbrook because he had a relationship with an employee against company policy, losing the strategist who had pushed the world's largest restaurant chain into delivery and online ordering.

The burger company's board voted last Friday (Nov 1) to terminate Mr Easterbrook, 52, after investigating the consensual relationship, according to a statement on Sunday. McDonald's policy doesn't allow the CEO to have a relationship with anyone in the company. It promoted Mr Chris Kempczinski to president and CEO.

According to the Wall Street Journal, Mr Easterbrook sent an e-mail to employees on Sunday.

"This was a mistake," he said in the e-mail, according to the newspaper. "Given the values of the company, I agree with the board that it is time for me to move on."

Ms Desiree Moore, a Chicago-based lawyer acting as a spokesman for Mr Easterbrook, said he is "deeply grateful for his time at McDonald's".

"He acknowledges his error in judgment and supports the company's decision," she said, adding that Mr Easterbrook will be not be commenting further.

Details of Mr Easterbrook's severance package will be disclosed by Tuesday in a federal filing, the company said.

McDonald's has not shared further details of the relationship that led to the firing.

Mr Easterbrook, a former head of the company's British operations, is divorced, according to The Sunday Times.

He joins a growing list of chief executives forced out over relationships with employees as more companies implement rules against dating subordinates in the #MeToo era.

With Mr Easterbrook's ouster, the burger chain loses a key architect of its push into electronic ordering and delivery - parts of the business where it was threatening to lag behind competitors such as Burger King. To stress urgency, he tied executives' compensation to the speed and breadth of the roll-out, and worked with vendors including UberEats.

For the most part, the strategy has worked - only a handful of other companies in the Standard & Poor's 500 have outperformed McDonald's since he took over in 2015. But along the way, Mr Easterbrook's changes caused some franchisees to chafe at the expenses being driven down from the corporate headquarters in Chicago.

HARASSMENT POLICY

The company's board had little room for error in how it handled the British executive's transgression. In May, the company had to revamp its harassment policy, under pressure from employees, labour advocates and members of Congress.

In a letter responding to an inquiry from United States Senator Tammy Duckworth, from the chain's home state of Illinois, Mr Easterbrook told her himself that the company has improved its policy and is committed "to ensuring a harassment and bias-free workplace".

At the time, the American Civil Liberties Union and the union-backed Fight For $15 just announced a handful of new lawsuits and 20 complaints to the US Equal Employment Opportunity Commission. They accused the company of failing to prevent misconduct including groping and inappropriate comments from supervisors, as well as retaliation for speaking up.

McDonald's independent group of franchisees, the National Owners Association, didn't immediately reply to requests for comment.

With Mr Easterbrook now out of the picture, it's left to Mr Kempczinski to continue the push into delivery and electronic ordering. He joined McDonald's in 2015 to oversee global strategy, business development and innovation. He most recently served as president of the US business.

Mr Joe Erlinger, who joined the company in 2002, will become president of the US business.

McDonald's has more than 38,000 locations in 100 countries, including 14,000 in the US.

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