By Heather Haddon 

Former McDonald's Corp. Chief Executive Steve Easterbrook said in a court filing Friday that he complied with all the terms of his separation agreement with the fast-food company and it shouldn't be allowed to claw back his multimillion-dollar severance package.

In his latest response to the lawsuit McDonald's filed seeking to recoup that severance, Mr. Easterbrook's attorney said the former CEO abided by all the demands made in the severance agreement. McDonald's fired him last year after he acknowledged having a consensual relationship with an employee.

The agreement required Mr. Easterbrook to comply with many terms, including refraining from working for a rival for two years, disparaging or suing the company, sending letters to employees or speaking publicly about McDonald's without permission. In turn, McDonald's granted Mr. Easterbrook pay and stock awards, his lawyer said in the court filing.

Mr. Easterbrook's lawyer said in the filing that the burger giant hasn't kept its side of the severance agreement by seeking now to claw back severance. That payout currently is estimated to be worth $57.3 million, according to executive-pay firm Equilar.

"McDonald's received the entire benefit of its bargain," said Daniel Herr, Mr. Easterbrook's Delaware-based employment attorney, in the filing in the state's Court of Chancery.

McDonald's said in a statement Friday it would continue to pursue the return of Mr. Easterbrook's severance. "Steve Easterbrook lied and destroyed evidence to conceal his inappropriate conduct and impede the investigation into his behavior," the company said. "He cannot hide behind baseless technical arguments."

The company made the rare move in August to fight over compensation awarded to a former executive. McDonald's said an investigation found evidence that the former CEO lied to the company and its board to cover up additional sexual relationships with employees to secure a multimillion-dollar severance package.

McDonald's said its investigators found email messages with attachments that contained dozens of nude and sexually explicit photos and videos of Mr. Easterbrook with company employees and other women between late 2018 and early 2019.

On Friday, Mr. Herr reiterated that McDonald's possessed information about the relationships on the company's servers when it first investigated his conduct last October, and fired Mr. Easterbrook without cause to avoid a lengthy dispute.

"Any attempt by McDonald's to point to 'new' information is futile," Mr. Herr said in the filing.

Mr. Herr reiterated Friday that the lawsuit should be moved from Delaware to a court in DuPage County, Ill., saying the CEO's equity awards specified Illinois as the forum for any legal challenge when signed. McDonald's has said Delaware is the correct venue for the case. Oral arguments for the case are scheduled for Nov. 13.

Write to Heather Haddon at heather.haddon@wsj.com

 

(END) Dow Jones Newswires

September 18, 2020 21:50 ET (01:50 GMT)

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