In another time and place, no one would have blinked at the affair British McDonald’s CEO had with an employee.
Steve James Easterbrook was the CEO of British McDonalds. He assumed the position on January 28, 2015. For 2016, Easterbrook’s total compensation was $15.4 million.
However, at the start of November 2019 McDonald’s board of directors terminated his contract. He was in violation of personal conduct policies. The personal conduct policy prohibits executives from dating employees, especially those situations where there are huge power differentials. I might add that Easterbrook is divorced. In addition, the relationship was consensual. There was neither overt harassment not abuse.
Company Policy
The core of Easterbrook’s problems was that he knowingly violated corporate policy. There was no gray area. The fact that the relationship was consensual was irrelevant. According to the code of conduct employees with “a direct or indirect reporting relationship… [are prohibited from] …dating or having a sexual relationship.”
The policy further states:
“It is not appropriate to show favoritism or make business decisions based on emotions or friendships rather than on the best interests of the company.”
Easterbrook will receive a modest severance of six months’ pay or around $675,000. I would hardly fear for his future. He is looking at more $40 million in compensation, plus stock options! There is no mention of what his partner (and very subordinate) co-worker in the relationship will get. If she retains her job, she will go back to her salaried, “9-5” position.
Since announcing the leadership change, McDonald’s has declined to reveal further details about Mr. Easterbrook’s relationship, including the employee’s position in the company, how the board found out about the relationship and how long it had lasted.
McDonald’s human-resources chief, David Fairhurst, left the company the day after Easterbrook’s departure was announced. McDonald’s is adamant that the two departures are unrelated, though I will retain my skepticism on that point.
If the news of the office affair found its way up to board (no one, it seems can identify just how), chances are that to my mind, someone in the human resources department knew quite well of the violation of their policy – and did nothing.
The behavior was enabled. It has also raised long-standing ethical matters. The past few years have raised several questions in regard to store-level sexual harassment litigation. More than one critic has surmised that the Easterbrook’s departure was the last straw in a pattern of sexual harassment and abuse.
Nothing to Hide or Everything to Hide?
Despite the images we see in the movies where powerful executives fall madly, passionately in love with secretaries, junior marketing executives and the like – then live happily ever after, I can point to real-life examples where one or both of the parties was badly hurt. I am not talking just of broken hearts, but of terminations, lawsuits, losses of reputation and severe penalties.
Easterbrook stood at an ethical crossroads. He took the wrong road. He had the option of leaving the company, telling the board that he was helping his partner find a new job. Apologizing to the board, or any other like combination. Unfortunately, NONE of those solutions would have been completely proper. He knew the policies.
Hindsight is a killer. He made a choice borne of “imagined power, rationalization and need.” Ethical training might have saved all of this scandal from happening. He knew better. His bad choices have shamed him.
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