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McDonald’s CEO Steve Easterbrook is pushed out over relationship with employee

McDonald’s CEO Steve Easterbrook
McDonald’s CEO Steve Easterbrook, in an email to employees, said: “Given the values of the company, I agree with the board that it is time for me to move on.”
(Getty Images)

McDonald’s chief executive has been pushed out of the company after violating company policy by engaging in a consensual relationship with an employee, the corporation said Sunday.

The fast-food giant said that former President and CEO Steve Easterbrook demonstrated poor judgment and that McDonald’s forbids managers from having romantic relationships with direct or indirect subordinates.

In an email to employees, Easterbrook acknowledged he had a relationship with an employee and said it was a mistake.

“Given the values of the company, I agree with the board that it is time for me to move on,” Easterbrook said in the email.

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McDonald’s board of directors voted on Easterbrook’s departure Friday after a thorough review. Details of Easterbrook’s separation package will be released Monday in a federal filing, according to a company spokesman. Easterbrook will also be leaving the company’s board. He was CEO since 2015.

McDonald’s would not provide details about the employee with whom Easterbrook was involved, and an attorney for Easterbrook declined to answer questions.

The board of directors named Chris Kempczinski, who recently served as president of McDonald’s USA, as its new president and CEO.

Two weeks ago, McDonald’s reported a 2% drop in net income for the third quarter as it spent heavily on store remodeling and expanded delivery service. The company’s share price has dropped 7.5% since, though it’s still up 9.2% for the year. The burger chain also has been plagued by declining restaurant traffic.

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The leadership transition is unrelated to the company’s operational or financial performance, the company said in a news release.

McDonald’s decision to act may be a sign of progress on workplace issues that have come to light in the #MeToo era, said Carl Tobias, a law professor at the University of Richmond.

“Other companies don’t always act on that kind of information or fire their CEO for that, and so it seems like they are trying to enforce a pretty strict policy in this situation,” Tobias said.

Among other challenges at its restaurants, McDonald’s has faced workplace harassment charges. In May, McDonald’s said it was enhancing training and offering a new hotline for workers after a labor group filed dozens of sexual harassment charges against the company.

Fight for $15, the group that filed the charges, said that McDonald’s response to its sexual harassment complaints has been inadequate and that “the company needs to be completely transparent about Easterbrook’s firing and any other executive departures related to these issues.”

Kempczinski joined McDonald’s in 2015 and was responsible for about 14,000 McDonald’s restaurants in the U.S. Enrique Hernandez, chairman of McDonald’s board, said in a statement that Kempczinski was instrumental in the development of McDonald’s strategic plan and oversaw the most comprehensive transformation of the U.S. business in McDonald’s history.

Kempczinski described Easterbrook as a mentor.


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