McDonald’s has fired its CEO for having a relationship with an employee. Easterbrook is widely considered to be one of the best CEO’s in the restaurant industry. He has brought about significant changes to McDonald’s since taking the role and was objectively doing a great job. So how did the board of McDonald’s come to the decision to fire him and what can employers learn from this decision?
Although this firing takes place in the United States, there are lessons for Canadian employers. The firing was a result of a relationship between Easterbrook and an employee. Regardless of whether the relationship was “consensual” there is a significant imbalance of power between Easterbrook and the employee and his firing marks a recognition on the part of the board of McDonald’s that that power imbalance creates a situation where consent cannot exist. McDonald’s recently revamped its harassment policy as a result of criticism over how it was handling harassment complaints. This resulted in the roll out of a new training program for workers to deal with harassment and a hotline for victims to report harassment. At the time of the revamp, McDonald’s declared its commitment to ensuring a harassment and bias free workplace. The revamp occurred in the face of numerous law suits against the company with allegations that the company has failed to prevent misconduct ranging from groping to inappropriate comments from supervisors and retaliation for complaining. In a press release announcing the new sexual harassment policy Easterbrook is quoted as saying:
“We have enhanced our policy so that it more clearly informs employees of their rights, more clearly defines sexual harassment, discrimination and retaliation and provides examples of what unacceptable behavior looks like….The new policy sends a clear message that we are committed to creating and sustaining a culture of trust where employees feel safe, valued and respected. Most importantly, it shows we’re changing to meet the needs of our workforce and the communities where we live and operate.”
The relationship between Easterbrook and the employee were contrary to the anti-harassment policy of McDonald’s. The firing of Easterbrook and the rolling out of the new harassment policy were indications of a significant problem at McDonald’s, a problem that resulted in a one day strike and the backing by the American Civil Liberties Union of numerous lawsuits against the Company. McDonald’s is clearly in a state of crisis when it comes to harassment and employee culture. In the face of this crisis, the Board has made what was no doubt a difficult decision to terminate a high performing CEO.
The lessons for Canadian employers include the importance of ensuring that a strong anti-harassment policy is in place, that training on the policy is continuously occurring and that an environment where employees are safe to report harassment without fear of retaliation is maintained. The failure to do so can have the result that we see at McDonald’s. Not only is McDonald’s facing numerous law suits for harassment but they have also lost a leader that was seemingly doing much to advance the Company. The experience at McDonald’s shows the importance of ensuring culture in a business is one where harassment is not tolerated and where leadership not only talks the talk but walks the walk. Relationships between leaders of companies and employees is always problematic due to the power imbalance. The power imbalance impacts the ability of the victim to resist or expressly indicate that the sexual conduct is unwelcome. This firing sends a signal to the public that the board of McDonald’s is committed to changing the culture for employees at McDonald’s, regardless of the cost.
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