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McDonald’s probes sacked CEO’s improper conduct ‘cover-up’

McDonald’s is investigating whether its ousted former CEO Steve Easterbrook covered up improper conduct by his colleagues, it has emerged.

The 53-year-old British executive was dismissed last November after his relationship with McDonald’s employee came to light, and is now facing a lawsuit which claims he lied about other liaisons. 

Now the US fast food giant says its ongoing probe will be widened to look at the actions of its human resources department, which some managers have accused of ignoring complaints under Mr Easterbrook’s leadership. 

‘The board will follow the facts wherever they may lead,’ McDonald’s said in a statement to DailyMail.com.   

Some former McDonald’s managers say that they feared retaliation if they complained to HR about the conduct of the firm’s executives, according to the Wall Street Journal, which first reported the investigation.

Others said they felt their complaints had been ignored during Mr Easterbrook’s tenure at the firm, from 2015 to 2019. 

The continuing investigation into Mr Easterbrook will now examine whether he covered up improper behavior by other employees, it is reported.  

A tip-off about one of Mr Easterbrook’s alleged relationships also raised concerns about the HR department, it is believed, but McDonalds did not give further details.

MailOnline has approached Mr Easterbrook’s legal representatives for comment. 

McDonald’s former head of human resources, David Fairhurst, was brought on by Mr Easterbrook soon after he became CEO, but left the company in November.

Mr Fairhurst streamlined many HR functions, including a change to performance reviews that allowed for less employee feedback about concerns, former managers told the Journal.

Now, McDonald’s tells the Journal that it fired Mr Fairhurst with cause after Mr Easterbrook’s dismissal because of conduct inconsistent with company policies and values. 

McDonald’s said at the time of his departure simply that Mr Fairhurst had left the company.  

‘I have decided the time has come for me to move on to my next career challenge,’ Mr Fairhurst said at the time.  

The McDonald’s lawsuit announced on August 10 claimed that Mr Easterbrook had covered up and lied about sexual relationships with at least three employees.  

In its complaint, McDonald’s said it had found dozens of nude or sexually explicit photos of women, including the three employees, that Easterbrook sent to his personal email account from his company email account.

McDonald’s said Easterbrook deleted the emails and attached photos from his company-issued phone shortly before his ouster, but they remained on a company server.

The firm is seeking to recoup tens of millions of dollars in severance and benefits in the lawsuit filed in Delaware court. 

The former CEO’s severance package was worth $41.8 million when he left the company, executive pay firm Equilar has estimated.  

Mr Easterbrook is disputing the lawsuit against him, calling it ‘meritless’ and ‘misleading’ in a court filing earlier this month.

His lawyers are seeking to dismiss the case and say the alleged emails were available to McDonald’s at the time of Mr Easterbrook’s separation agreement. 

Mr Easterbrook is also challenging the lawsuit on technical grounds, saying it should have been filed in Illinois rather than Delaware.   

The lawsuit came nine months after Mr Easterbrook was ousted and admitted that his relationship with an employee was a ‘mistake’.   

The woman has never been named, but another former girlfriend told DailyMail.com earlier this month that his alleged behavior was ‘out of character for the gentleman I knew’. 

Denise Paleothodoros revealed how she had flown on a private McDonald’s plane to on vacations to Cabo San Lucas, New Orleans, Lake Tahoe, Scottsdale and New York.

At one stage she had plans to move into Mr Easterbrook’s $2.5million apartment in Chicago. 

‘His actions described are not the actions of the person I knew. He was very careful about his image,’ she said. 

She said she was speaking out because she has ‘been lumped together with these other women that were involved in Steve’s problems.’ 

Before his firing, Mr Easterbrook had been credited with modernizing the chain during his four-year tenure, which saw the introduction of touch-screen kiosks and an all-day breakfast menu.    

He was replaced as CEO by Chris Kempczinski, who was previously the president of McDonald’s USA.   

Mr Kempczinski promised earlier this month to ‘strengthen our culture and maintain an environment in which members of the McDonald’s System are encouraged to and comfortable with coming forward’ about any misconduct.   

Announcing the lawsuit against his predecessor, he said: ‘We recently became aware through an employee report of new information regarding the conduct of our former CEO, Steve Easterbrook. 

‘We now know that his conduct deviated from our values in different and far more extensive ways than we were aware when he left the company last year. 

‘While the Board made the right decision to swiftly remove him from the company last November, this new information makes it clear that he lied and destroyed evidence regarding inappropriate personal behavior and should not have retained the contractual compensation he did upon his exit.’

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