McDonald’s Can Move Ahead With Clawback Suit Against Ex-CEO

Company properly filed the case in Delaware, judge concludes
Food chain says Easterbrook duped it into paying severance

Steve Easterbrook
Photographer: Joshua Lott/Bloomberg

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By Mike Leonard and Jef Feeley

February 2, 2021 at 10:26 PM UTC

This article is for subscribers only.

McDonald’s Corp. can go forward with its lawsuit to claw back $37 million in stock from former Chief Executive Officer Steve Easterbrook over his alleged cover up of romantic dalliances with subordinates.

McDonald’s suit against Easterbrook -- ousted in 2019 when some of the relationships came to light -- raised legitimate questions about the “extra-contractual falsehoods” the former executive used to dupe the chain into paying his severance package and stock awards, Delaware Chancery Judge Joseph Slights III said in a 22-page ruling Tuesday.

The judge dismissed the argument that McDonald’s forfeited the right to pursue legal claims against Easterbrook when it agreed to a voluntary separation agreement instead of firing him, saying the agreement “is not so broad that it would deny McDonald’s the right to hold its former CEO” accountable.