In November of 2019, the Board of Directors of fast-food chain McDonalds announced that it had terminated the employment of CEO Steve Easterbrook. This happened after it came to light that Easterbrook had relations with a McDonalds employee. The board noted that this did not only violate McDonalds policies but also showed poor judgment on Easterbrook’s part as the CEO of the company. I wrote a short article on it, and focused on the need for companies to ensure their policy library is in order. Especially the ones around relationships between colleagues, their harassment and grievances policies and conflict of interest.
But wait, there’s more
This week, McDonalds filed a lawsuit against Easterbrook, based on new information. You can find the link to a very good article in the New York Times here. Because of the amount of details and the fact that this still may have to go to court, I won’t go too deep into the case. Rather I will distill lessons because it’s clear that even without a court ruling, we can learn quite a lot from the events.
The Good, the Bad and the Ugly
Let’s look at the context of the full case. I’d like to talk about what went well and what leaves room for improvement, and where we ought to tighten specific processes to prevent things from happening.
The Good
The Good in this story is that in this case, the company acts on complaints and grievances. Whenever your leadership, supervisor, legal team or human resources receives a complaint or hear of a potential issue on the work floor, you act. Investigating the claim is a good start. Even when you think the claim can’t possibly be true, rather than assuming that, you look into it – unbiased, obviously.
Using relevant and appropriate investigation tools and systems, you see whether the claim holds true. Regardless whether you are a Fortune 500 company or a local shop around the corner, the right thing to do is to take it seriously, and act accordingly. It shows strong leadership, it is the right example for other managers and employees, and it protects the company and its employees.
In addition, having polices in order helps when you are faced with unwanted behavior. Clearly describing what happens in those cases ensures everybody knows the rules, and is clear on the consequences. Including what I call an ‘ethics clause’ in separation documents is a smart move, too.
The Bad
The Bad is running an insufficient or unsatisfactory investigation. When you run an investigation, you should think and plan ahead on how you want to investigate, who will be part of the investigation and what the areas of investigation will be. Will you conduct interviews, and if so, with whom? Will you research and analyze computers, phone or CCTV equipment?
You don’t want to cast your net too widely because ideally, you will be able to run the investigation in reasonable amount of time. Yet, investigate too little may mean that you will miss information. That means you have to go back – bad; or you take decisions based on incomplete information – worse; or you take a decision based on incomplete information, realize that, and have to go back anyway – the worst.
In cases where photos and videos are involved, just assume that files are deleted, for the sake of the investigation planning. So, work with specialists and the appropriate legal representation to find ways to analyze servers and archives.
The Ugly
The Ugly in this case is the mentioning in the lawsuit of a retention bonus worth “hundreds of thousands of dollars” that Easterbrook awarded to one of the employees he was involved with. The NYT article states that these types of bonuses didn’t require Board approval. That in and of itself is not strange: there are usually policies in place to govern these grants, as well as approval matrices and processes. The amount is concerning for a grant without any apparent approvals, but I know too little about the context, reason, approval and processes.
Be that as it may, there is, from a distance, the appearance of a conflict of interest. Because of relationship between the two, there is at least an appearance that she received this retention bonus because of it. Her performance, achievement, merit and any other factor suddenly are less important or could be questioned. Her colleagues may feel mistreated because they didn’t receive one – if that is the case – even though they may feel they deserve it as well. And it’s no longer relevant if they deserve it at.
Prepare
I wish I could say otherwise, but just having a policy in place that prohibits bad behavior doesn’t mean it’s not going to happen. But it is a crucial way to ensure you can act appropriately.
So, having strong policies in place and implementing a clear and tight grievances process outlining investigations is the way to go. Next to that, you nurture a culture where this type of behavior doesn’t happen. That starts with finding the right type of employee. In addition to the employees’ results, their attitude and behavior need to be important criteria for success, promotion and succession.
In this case, the main lesson is that you need to prepare. Take the time and invest in up-to-date, clear and adequate policies and procedures. Train your managers and explain the process to your employees. With that, you act, immediately, effectively and timely, to whatever is brought to your attention. And if you’re not sure what to do, you ask for help. Not knowing what to do and doing nothing is not a good approach in a case when it goes to court. Ask for and solicit help, so you can do the right things, and do them right.
