Why Was the Board of Directors Asleep at the Wheel?
McDonald’s is suing its former CEO Steve Easterbrook after an investigation found he had a short-term, consensual relationship with an employee over text and video. It also found three additional relationships with employees that were sexual in nature, including the one that triggered the July 2020 investigation.
The company said in its lawsuit that its investigation found dozens of nude and sexually explicit photographs and videos of women, including employees, sent from Easterbrook’s corporate email account to a personal one.
The Wall Street Journal reports that because McDonald’s fired Easterbrook without cause, he received severance and benefits that he could have been denied if the board of directors found him at fault. Easterbrook was allowed to walk away with compensation, benefits, and stock. The company now says he should have been fired for cause, and it is suing to recover his severance, now estimated to be worth $57.s million.
Now it’s the board’s turn to be investigated. Why didn’t they uncover the extent of the inappropriate relationships? Outside counsel shared the results of its investigation last fall with the board. The board changed its position and it. too, now says Easterbrook should have been fired for cause.
The lessons to be learned from the McDonald’s case is to not take sexual harassment lightly. It’s hard to believe that in 2020, some 56 years after the Civil Rights Act of 1964 officially made sexual harassment illegal in the workplace, instances of such bad behavior persists. It seems corporate top executives and board members still may not be taking improper sexual behavior that threatens employees seriously.
Sexual harassment is a form of sex discrimination. The legal definition of sexual harassment is “unwelcome verbal, visual, or physical conduct of a sexual nature that is severe or pervasive and affects working conditions or creates a hostile work environment.” Two specific legal definitions of sexual harassment have been established in employment law: quid pro quo harassment and hostile environment sexual harassment.
Sexual harassment can occur when a superior, such as the CEO, communicates with a subordinate sexually-charged text messages or photos online. Employees may feel intimidated if they are the recipient, even if they do not speak up if it creates a hostile work environment.
I’ve found in my experience that acts such as sexual harassment occur because top management has not established an ethical tone at the top. This seems to be the case with McDonald’s. In all likelihood, someone knew about the inappropriate online communication between Easterbrook and some employees. It’s not a stretch to say those in the know didn’t come forward because they feared reprisals, maybe even being retaliated against, or fired if they spoke out publicly. Now, former workers at the fast-food chain want the company to crack down on sexual harassment in all its restaurants.
It’s ironic that a former McDonald’s employee filed a proposed class-action lawsuit in November 2019 against one of its Michigan franchisees. She's one of at least 50 workers who have filed sexual harassment charges against the company with the U.S. Equal Employment Opportunity Commission or in state courts over the past three years. The suit alleges that the company tolerates the harassment and low wages.
She alleges that a co-worker groped her, called her names in front of her co-workers, and physically assaulted her repeatedly. The general manager ignored her co-worker's repeated harassment of her and her colleagues, she said. Eventually she was transferred to another location, but the co-worker who allegedly harassed her remained at the original location.
It could be that other harassed employees will come forward now that the genie is out of the bottle. McDonald’s needs to act quickly to regain the trust of its employees.
Make no mistake: sexual harassment in the workplace is a real threat. It appears some top management folks were not paying attention when the floodgates opened on Harvey Weinstein.
Posted by Steven Mintz, aka Ethics Sage, on August 20, 2020. You can sign up for our newsletter and learn more about Dr. Mintz’s activities at: https://www.stevenmintzethics.com/. Follow him on Facebook and on Twitter .