Shivangi Prakash-
A McDonald’s shareholder has filed a derivative lawsuit in Delaware State Court against the fast-food chain’s board of directors and consultant Morgan Lewis & Bockius, criticising their handling of the company’s sexual harassment, racial discrimination, and misconduct charges.
The 126-page complaint, filed in Delaware Chancery Court on Wednesday, contends that the board gave management too much power and enabled harassment and discrimination charges to continue, even against some of the company’s senior executives.
Former McDonald’s Chief People Officer David Fairhurst sexually harassed female employees, according to media reports, human resources complaints, and company records, and CEO Stephen Easterbrook had inappropriate sexual relationships with junior colleagues, according to McDonald’s investor Phyllis Gianotti.
Morgan Lewis, according to Gianotti, hurried its initial inquiry into then-CEO Steve Easterbrook’s illicit connection with an employee, which ended within eight days.
The lawsuit also mentions earlier racial discrimination accusations and a drop in the percentage of Black employees at McDonald’s.
The company has denied that Black owners are treated differently than other owners. The company has also denied treating Black employees unfairly and has stated its commitment to diversity and inclusion on numerous occasions.
In a statement released on Thursday, McDonald’s legal counsel Ron Olson of Munger, Tolles & Olson stated that Gianotti’s derivative claim had “no substance.”
“The Board has acted in accordance with McDonald’s values and will continue to do so, supporting the Company’s efforts to ensure fair opportunity for employees, franchisees and suppliers,” Olson said.
This latest lawsuit has a variety of allegations levelled against the chain in recent years, but probably the most intriguing feature of it is that it still depends on the Easterbrook controversy, implying that his firing in 2019 will remain a blemish on the company’s reputation.
McDonald’s is still pursuing Easterbrook in a case filed last year in an attempt to recoup the 26 weeks of severance pay and stock options he received as part of a separation agreement.
The latest lawsuit joins a slew of legal issues that have dogged the corporation, its franchisees, and its leaders in recent years.
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