A flirt too far?

The current litigation that is unfolding in Delaware is causing a tumultuous media stir. Steve Easterbrook, the erstwhile chief executive of the “golden arches” franchise in the UK, is facing legal action to clawback the eye-watering $40m that McDonald’s paid him in order to depart the company amicably last November. Mr Easterbrook was sacked for having an affair with an employee, presumably in breach of US style policies (often referred to as “love contracts”) which would have prohibited his personal relationship involvement with an employee of the company to avoid any presumption of or actual conflict of interest or abuse of position. At the heart of this action is the claim by McDonald’s that, after a “tip off”, they discovered that Mr Easterbrook had been sexually involved with three other female employees not known to them. McDonald's have argued that Mr Easterbrook lied to them about his liasons. Mr Easterbrook is claiming that the company was aware (at least constructively) of his other relationships as the emails that have revealed his numerous internal paramours were on the McDonald’s server all the time and were fully accessible. His legal team exhort that this is sour grapes by an employer that wants to resile from a bargain they struck with Easterbrook to manage his exit amicably and with minimal press intrusion. 

Lurid details have been recounted involving work emails being used to send nude photos by Mr Easterbrook to his lovers and allegations made about favourable grants of shares after sexual trysts. Mr Easterbrook was allegedly a seasoned flirt and this issue also seems to have been reheated in the press. There is also the irresistible whiff of hubris and hypocrisy as Mr Easterbrook had been an outspoken advocate of #MeToo and had extolled the progress of the company’s efforts to tackle and eradicate sexual harassment (although I should say that there is nothing in the media reports to suggest that there was anything non-consensual in any of Mr Easterbrook’s relationships). In short, with big money, sex and hubris in the cocktail, it is hardly surprising that the press have gobbled up this story. The great irony is, of course, that the unsavoury details that the press are now feasting on is precisely the sort of grubby, dirty laundry that both of the parties were at pains to keep out of the limelight back in November. The washing has most certainly been aired and hung out for public consumption.

Mr Easterbrook’s case follows a long line of cases involving senior executives/professionals and salacious allegations concerning female reports. With the emergence of the #MeToo movement almost three years ago (following Harvey Weinstein’s gross misdemeanours), tolerance for bad behaviour in respect of sexual harassment is wafer thin. Regulators across the professions have stepped up the rhetoric and action against these sort of conduct issues. In financial services, for example, the FCA’s Megan Butter’s letter to the Chair of the Women and Equalities Committee in 2018 made it plain that this sort of conduct goes to culture and the “fit and proper test” when assessing bankers’ behaviour and regulatory standing. In my profession it was recently reported that the SRA has 117 unresolved complaints of misconduct concerning sexual harassment waiting to be investigated and determined. Recent high profile action against Ryan Beckwith at Freshfields and Gary Senior (and others) at Baker McKenzie illustrate the seriousness with which the SRA is taking this subject in the legal profession. Similar stances are being taken elsewhere in accountancy with the FRC and in other professions the same (or similar) approach is being taken.

My firm has devised a unique bespoke service that combines legal and non-legal support to organisations to prevent and deal with issues that may have already arisen. Our legal support includes excellence in employment law, reputation management and regulatory legal matters and we have teamed up with Bell Yard Communications (a leading public relations specialist) and HelloSelf (one of the preeminent clinical therapists to support those going through the inevitable trauma and stress of an investigation and further proceedings). Our service, which is known as R4 (Review, Report, Resolve, Respect), aims to prevent these issues by education and training but also to deal with issues when things may sadly go wrong. More details of our service will be available soon on launch.

One thing for certain is that this issue is not going away anytime soon and societal changes which impact on culture, behaviour and regulation are now mainstream.