(Bloomberg) — McDonald’s Corp. investors are demanding the fast-food chain hand over internal files about what directors knew about former Chief Executive Officer Steve Easterbrook’s romantic dalliances with subordinates, which led to his 2019 ouster and a legal fight over a $37 million severance.
Three McDonald’s shareholders, including a New York City police detectives’ pension fund, want the company to turn over records about Easterbrook removal and the firing of David Fairhurst, the chain’s top human-resources executive, according to a lawsuit unsealed Friday in Delaware Chancery Court.
The men were ousted the same day over allegations Easterbrook had affairs with staffers while Fairhurst “exhibited sexually inappropriate conduct” at corporate events, the investors said. Their complaint didn’t specify why they were seeking the internal documents other than they seek to investigate alleged misconduct, but such requests are sometimes made before a company is sued by shareholders.
“McDonald’s record of sexual misconduct among its leadership may explain the Company’s history of tolerating pervasive sexual harassment and discrimination,” the investors said.
Lauren Altmin, a McDonald’s spokeswoman, didn’t immediately return an email for comment Friday on the investors’ suit.
McDonald’s is suing Easterbrook in Delaware to claw back $37 million in stock awards because of his allegedly inappropriate sexual relationships with company colleagues.
The case over the propriety of Easterbrook’s severance package is set to go to trial in May. It’s become one of the highest-profile examples of a big corporation grappling with the #MeToo era. McDonald’s officials accused Easterbrook of lying to them about how many subordinates he had sexual relationships with and destroying evidence of those liaisons.
While McDonald’s already has turned over some files about Easterbrook, the records they’ve provided about Fairhurst’s dismissal are “paltry,” according to the investors’ complaint. The company contends the simultaneous ousters weren’t related.
The investors are interested in board records about “remedial measures taken in response to any complaints of sexual harassment, gender-based discrimination, and/or racial discrimination” levelled against McDonald’s and any probe of the company’s “HR department,” according to the suit.
The case is The Detectives’ Endowment Association Inc. v. McDonald’s Corp., 2021-0673, Delaware Chancery Court (Wilmington)