McDonalds CEO sacked after affair with employee

Relationships at work can be a murky area and one of the biggest employment law updates of the past few weeks has been the news that McDonalds has fired its CEO, Steve Easterbrook, for having an affair with a junior employee. McDonalds found that the relationship had been consensual but that Mr Easterbrook had “violated company policy” and “shown poor judgement” for engaging in a relationship with a junior member of staff.

Mr Easterbrook started working for the fast food colossus in 1993 and worked his way up the company. He left McDonalds in 2011 to become boss of Pizza Express and then Asian food chain Wagamama. He returned to McDonalds in 2013.

Mr Easterbrook was paid $16m last year and the details of the termination package were not revealed to the public.

This high profile dismissal follows Intel boss Brian Krzanich stepping down last year after having a consensual relationship with an Intel employee.

The difficulties of policing relationships at work

Relationships at work are a fact of life. However, they can cause a headache for HR departments.

It is understood that McDonalds’ company policy bans dating and sexual relationships between employees who have a “direct or indirect reporting relationship”.

Many large US companies have introduced policies banning relationships between staff or requiring  employees who enter into relationships with other colleagues to disclose the relationship to HR.

Such policies are much less common in the UK. The Human Rights Act 1998 gives employees a right to private life, and that includes personal and sexual relationships. A policy that impacted upon the right to a private life would be difficult to enforce and would likely be unlawful.

Can an employee be sacked for engaging in a relationship with a fellow employee?

For a dismissal to be fair, employers must be able to show that the dismissal was for one of the following five potentially fair reasons:

  • a reason related to an employee’s conduct
  • a reason related to an employee’s capability or qualifications for the job
  • because of a redundancy
  • because a statutory duty or restriction prohibited the employment being continued
  • some other substantial reason of a kind which justifies the dismissal.

The employer must be able to show that they followed a fair process and that the dismissal was within the “band of reasonable responses”.

It is difficult to see how an employer could fairly justify terminating an employee’s contract for breach of a policy banning them from having a consensual relationship with a colleague. The employer would likely have to be able to show that the relationship was in fact a conflict of interest and was prejudicial to the employer. In most cases, it will be very difficult for the employer to evidence this.

The reality is that in most cases that do not involve such an influential and high profile individual as Mr Easterbrook, it would be difficult to justify terminating employment for conducting a relationship with a colleague.

This article was written by Employment Lawyers Edinburgh.