McDonald’s Fires CEO Steve Easterbrook Over Relationship With Employee

McDonald’s Corp. fired Chief Executive Officer Steve Easterbrook because he had a consensual 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 Friday to terminate Easterbrook, 52, after investigating the relationship, according to a statement Sunday. McDonald’s policy doesn’t allow the CEO to have a relationship with anyone in the company. It promoted Chris Kempczinski to president and CEO.

According to the Wall Street Journal, Easterbrook sent an email to employees Sunday. “This was a mistake,” Easterbrook said in the email, according to the newspaper. “Given the values of the company, I agree with the board that it is time for me to move on.”

With 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 rollout, 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, 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, labor advocates and members of Congress. In a letter responding to an inquiry from U.S. Senator Tammy Duckworth, from the chain’s home state of Illinois, Easterbrook told her himself 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 new lawsuits and 20 complaints to the U.S. 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 Easterbrook now out of the picture, it’s left to 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 U.S. business.

Joe Erlinger, who joined the company in 2002, will become president of the U.S. business.

McDonald’s has more than 38,000 locations in 100 countries, including 14,000 in the U.S.

Source: Bloomberg

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