No Money-Back Guarantee – When Severance Agreements Go Wrong

A case in the US courts involving the former CEO of McDonald's may appear to have very little to offer in the way of lessons for regulated financial services businesses in the Channel Islands.

But the case against Steve Easterbrook currently in the Delaware court has a very clear lesson for regulated employers in Jersey and Guernsey about termination payments, internal investigations and governance.

Factual background

Mr Easterbrook, originally from Watford, rose through the ranks at various high street chain restaurants to take over at McDonald's. He was very successful and reinvigorated the McDonald's offering doubling the share value.

In November 2019 the board of McDonald's terminated his employment following discovery of a non-physical consensual relationship (via text messages and video calls) between Mr Easterbrook and a colleague. That relationship was contrary to McDonald's policy that prohibits any kind of intimate relationship between employees