Barrack, Rodos & Bacine Partner Presses For Documents On Sexual Harassment and Discrimination at McDonald's

10/27/2021 - On October 26, 2021, Barrack, Rodos & Bacine partner Michael Toomey represented three McDonald's shareholders in Delaware Chancery Court, demanding, in accordance with Delaware corporate law, that McDonald's Corporation provide documentation of sexual harassment, sexual misconduct and discrimination at all levels of the company. 

McDonald's has struggled with sexual harassment and discrimination during the last decade with workers' strikes, Congressional inquiries and dozens of lawsuits alleging misconduct.  These issues crystallized in November 2019 when McDonald's simultaneously fired its CEO, Steve Easterbrook, and Chief HR Officer, David Fairhurst, for acting inappropriately with McDonald's employees.  Fairhurst was terminated with cause, but Easterbrook was terminated without cause and walked away with $47 million in severance.  At the time, McDonald's stated that he only had engaged in a single, non-physical relationship with an employee. 

In August 2020, McDonald's surprised the world by suing Easterbrook and demanding that he return his severance, citing the additional complaints about his behavior that had surfaced after his termination.  This led the company to search Easterbrook's emails that had been stored on company servers.  Lo and behold, that simple search -- which could easily have been done earlier, when Easterbrook was terminated without cause -- revealed 40 explicit photographs of McDonald's employees with whom Easterbrook was having sexual relationships in 2018 and 2019.  The company also determined that he had given one of these employees a very large equity bonus. 

In response to these revelations, Barrack, Rodos & Bacine, on behalf of shareholders, sent demands for documents to McDonald's, which is a customary practice under Delaware law that allows shareholders to determine whether to file a lawsuit regarding mismanagement.  In August 2021, after reviewing the documents provided by McDonald's and determining that the production was inadequate, Barrack, Rodos & Bacine sued McDonald's for additional documentation responsive to the demands. 

On October 26, 2021, Barrack, Rodos & Bacine conducted a one-day trial before Vice Chancellor Slights of the Delaware Chancery Court to resolve whether McDonald's production was inadequate.  After hearing argument, the Court took the matter under advisement and will issue a written decision at a later time. 

For more information, please contact BR&B partner Michael A. Toomey at mtoomey@barrack.com.