Steve Easterbrook steps down as CEO of McDonalds allegedly due to a personal relationship, we look at the employment law elements.
What is the news?
It was reported yesterday that McDonald’s Chief Executive, Steven Easterbrook, has stepped down from his role after having a consensual relationship with an employee.
What does the news mean?
Although some newspaper headlines suggested that Mr Easterbrook was “fired”, based on the reports it seems that there was perhaps a mutual agreement (instigated by McDonalds) that he should leave and he offered his resignation. The exact reason for his departure has not been officially announced however it is understood that it was likely to relate to a consensual relationship he had with a colleague. McDonalds has a business conduct standards policy which sets out that managers cannot have romantic relationships with subordinates. The policy was quoted in The Telegraph as stating:
“In order to avoid situations in which workplace conduct can negatively impact the work environment, employees who have a direct or indirect reporting relationship to each other are prohibited from dating or having a sexual relationship.
It is not appropriate to show favouritism or make business decisions based on emotions or friendships rather than on the best interests of the company”.
It seems it was considered by the McDonalds Board that the consensual relationship compromised Mr Easterbrook’s position in the company, requiring his departure. It was reported that he agreed the relationship was a “mistake” and that it was “time to move on”. According to newspaper reports he leaves with his notice pay, bonuses and his shares.
Other high profile companies have commented on the use of these policies. The Ryanair CEO, Michael O’Leary, was reported as saying that Ryanair do not have a personal relationships policy and as long as it was between consenting adults then there was no issue. Other journalists have commented that relationships at work are impossible to manage and often cause difficulties.
What we think of the news
There is no legislation that sets out a requirement to prevent inter-work relationships, it is entirely down to the employer if they wish to have a policy of this kind in place. Although there is no legal expectation of such a policy, there are some risks which may arise so it is understandable that some companies may choose to have them in place. It is likely to be dependent on the industry the employer may operate in (where the risk of claims may be higher), the likelihood that relationships may arise and also whether a company feels a relationship will cause a concern or issue in its workplace.
The risks associated with inter-work relationships could be, for example, where one person is more senior and could have an influence on managerial decisions so appearing to treat someone more favourably (or even less favourably, depending on the outcome of the relationship). This could cause employee relations and potentially discrimination issues. If there is sexual or inappropriate behaviour between individuals at work this may cause a hostile environment, leading to harassment claims and potentially victimisation in some cases. There is also a potential conflict of interest for senior staff who hold executive duties to act in the best interests of the company. This may have been the case for Mr Easterbrook (we are only speculating of course).
As a whole, only a few employers we know of have personal relationship policies which state that no relationship is allowed at work. Many people meet at work and I myself have worked with a number of couples as colleagues. It tends to be generally accepted that people will behave sensibly at work and that their private life is their own. For those that do have policies, there is often a “declaration clause” which allows for the employees to declare their relationship and then the company can make a decision as to whether that relationship can continue. This may be the best way of handling these tricky issues although of course an employer will need to justify their position if they say yes to some relationships and no to others. As can be seen in Mr Easterbrook’s case, these types of polices can have a serious impact on somebody’s employment and employers should think carefully whether a policy of this type is needed and appropriate.
If you would like advice on the way you or your company handle issues relating to the above content you can contact Solicitor, Heena Kapadi or Senior Associate, Siobhan Howard-Palmer.
This contains a general overview of information only. It does not constitute, and should not be relied upon, as legal advice. You should consult a suitably qualified lawyer on any specific legal problem or matter.
