McDonald’s Continues Fight with Former CEO

2020-09-05 by Ronn Torossian

The legal fight between fast-food giant McDonald’s and its former CEO continues to be acrimonious. This could have Public Relations ramifications for both the brand and the embattled ex-boss.

Initially, when Steve Easterbrook left McDonald’s over disclosures about an “inappropriate” relationship with a company employee, the two parties parted ways relatively amicably, with McDonald’s giving Easterbrook a multi-million-dollar payout. Then, after more dirt came out on Easterbrook, the company filed a suit to reclaim $42 million due to Easterbrook allegedly “lying” to investigators prior to his dismissal.

Easterbrook immediately filed a motion to dismiss the lawsuit in an effort to keep his severance, but the company is not backing down. A spokesperson recently told the media: “When McDonald’s investigated, Steve Easterbrook, lied… His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law.”

And that was just the beginning. When Easterbrook’s lawyer argued that McDonald’s “must have known” about the former CEO’s other “relationships,” the company pushed back, saying Easterbrook “fraudulently obtained a termination without cause,” which entitled him to seek a strong settlement he should not have been able to obtain.

Now, questions about what company investigators – and thus the board – knew, as well as when they knew it is coming into the growing PR narrative around the court case. Easterbrook is claiming he made mistakes and owned up to them, while McDonald’s is claiming he outright and intentionally misled their investigative team. But, from a PR perspective, it seems to many people that this is a fight about the money. It’s being couched as a fight about honesty and integrity, but it’s “really” about who keeps $42 million dollars.

The longer this fight goes on, the more likely it will become a larger PR issue. And, if recent years are any indication, that could mean activists calling for better pay and working situations for fast-food workers may start asking why a fired CEO deserved $42 million to go away in the first place.

Some have already begun to raise that question, but it hasn’t caught on in the national consciousness yet. It may not, but McDonald’s must understand that the company is on the clock with everything else happening. The more news stories that come out talking about amounts involved in the payout, the more likely it will be that people take notice, then use those stories to amplify and broadcast their own agenda.

For Easterbrook, how he is seen to have conducted himself through this process may play a role in where he goes from here. Right now, his personal brand is tarnished, and, with more companies paying attention to how a CEO’s personal brand impacts their own brand messaging, that could be a concern, especially if this continues to drag on.

Ronn Torossian is CEO of 5WPR, a leading consumer PR agency.

Ronn Torossian: Insights from a Native New Yorker and CEO of 5WPR

Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 250 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities