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McDonald's sues ousted CEO, alleging employee relationships

McDonald's is suing former CEO Stephen Easterbrook over allegedly covering up relationships with other employees and destroyed evidence. Yahoo Finance's Alexis Christoforous and Brian Sozzi break down the details.

Video Transcript

ALEXIS CHRISTOFOROUS: We want to bring to your attention some news regarding McDonald's this morning. The fast-food giant suing its former CEO Steve Easterbrook for allegedly lying during the company's internal probe into his behavior. You'll remember that McDonald's announced back in November that it had terminated Easterbrook for having what they called at the time a consensual relationship with an employee.

Brian Sozzi has been looking over this one this morning, and, Brian, what other information do we have about this story?

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BRIAN SOZZI: Alexis, stunning allegation. Almost lost for words. They say they fired-- McDonald's fired Easterbrook on November 1. At the time, he said that he did not engage in a sexual relationship with an employee, and he got a separation agreement.

Now, this is what McDonald's alleges right now. McDonald's has now learned that Easterbrook concealed evidence and lied about his wrongdoing. Recently identified evidence shows that Easterbrook had physical sexual relationships with three McDonald's employees in the year before his termination.

It doesn't end there, though-- that he also improved an extraordinary stock grant worth hundreds of thousands of dollars for one of those employees in the midst of their sexual relationship, and he was knowingly untruthful with McDonald's investigators in 2019. Just stunning allegations for a guy, in many respects, that brought McDonald's back to life.

So obviously McDonald's is trying to recoup that severance payment that they made to Easterbrook.

ALEXIS CHRISTOFOROUS: Wow. Lots of drama there. McDonald's, by the way, down just fractionally here in the premarket.