McDonald's CEO Controversy Over Workplace Relationship

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McDonald's CEO Controversy Over Workplace Relationship

McDonald's CEO Controversy Over Workplace Relationship

The CEO of McDonald’s, Steve Easterbrook, has been dismissed from his role as both CEO and president of the company. He has also resigned from his position as director on the Walmart Inc board.

Full details of Mr Easterbrook’s dismissal, and the circumstances surrounding it, remain unknown. However, McDonald’s released a statement on Sunday 3 November 2019 that Mr Easterbrook had “demonstrated poor judgment involving a recent consensual relationship with an employee”. Mr Easterbrook is reported to have engaged in a relationship that violated the company’s Standards of Business Conduct, which provides that a conflict of interest situation will arise where an employee is ‘in a personal or romantic relationship with someone while also being in a direct or indirect employment reporting relationship with that person’.

The policy also requires that ‘employees who have a direct or indirect reporting relationship to each other are prohibited from dating or having a sexual relationship’. Any employee’s who are in such a relationship are advised to inform their Human Resources Representative or a Director immediately.

Details of the relationship have not been disclosed and the employee’s position in the company is unknown, so it is unclear whether the relevant employee reported to Mr Easterbrook directly. Mr Easterbrook has been replaced in both roles by Mr Chris Kempczinski, previously president of McDonald’s USA.

Mr Easterbrook’s dismissal follows the resignation of Intel CEO Brian Krzanich in June of last year, following a similar investigation into Mr Krzanich’s consensual relationship with an employee, which constituted a violation of company policy. It would seem that an increasing number of companies are placing emphasis on introducing and enforcing policies which cover workplace relationships. These policies may ban workplace relationships in their entirety, prohibit relationships between those who have a direct reporting relationship, or introduce a requirement that workplace relationships be disclosed to HR.

The reasoning behind the introduction of such policies is to prevent the potential abuse of power by those in a senior position and also to reduce the risk of potential conflicts of interest. However, many employees may feel that a strict policy on workplace relationships encroaches into their private lives and is a disproportionate measure.

If you would like more information on this update or assistance with any related matters, please contact Millie Kempley or Sophie Gladwell, or give us a call on 0345 070 6000.

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