McDonald's looks into human resources department in CEO probe

McDonald's has expanded its investigation into its former CEO's possible misconduct. The company's board of directors has hired an outside law firm as part of a probe into its human resources office to determine if Steve Easterbrook, who exited abruptly in November, covered up misconduct for others in that department.

The Golden Arches didn't share details about the allegations. McDonald's conducted an internal investigation in 2018 after employees complained about inappropriate physical contact between the company's top HR executive, David Fairhurst, and a subordinate at a holiday party, the Wall Street Journal reported Tuesday.

Easterbrook was named McDonald's CEO in 2015. He is widely credited with turning the company around, emphasizing technological innovation and striking deals with delivery companies like GrubHub. He pushed through acquisitions of artificial intelligence companies that some analysts have praised for reducing customer wait times and lower labor costs. Notably, McDonald's stock price more than doubled during Easterbrook's time at the helm.

Easterbrook also appointed Fairhurst to lead the HR department. Fairhurst left McDonald's around the same time as Easterbrook, but the company said at the time that the departures were unrelated.

Employees in human resources also told McDonald's legal department that they felt passed over for advancement opportunities because they weren't part of an after-hours social gathering, the Journal reported.

McDonald's fired Easterbrook last year after he admitted to sending explicit messages to an employee. He left with a multi-million dollar severance package, even though McDonald's corporate policy prohibits sending explicit messages to suborindates.

McDonald's severance policy for executives states that an employee's termination will be defined as for "cause" when there is a "material violation of McDonald's standards of business conduct or other employment policies." The company's most recent standards of business conduct, according to its website, make clear that romantic relationships between a manager and a direct or indirect report amounts to a conflict of interest and is prohibited.

In July, McDonald's received information from another company employee suggesting that Easterbrook had multiple affairs with subordinates. The same person also told the company about issues within the human resources department.

The company earlier this month sued Easterbrook to reclaim millions of dollars in compensation, saying he would have had to forfeit that money if he had been truthful about he extent of his relationships.

McDonald's named Heidi Capozzi, who had worked for Boeing, as human resources chief in March. Capozzi is conducting a review of the department, including how performance is evaluated and how employee concerns are raised and investigated.