Want to Avoid McDonald’s Fate? Here’s How

 Want to Avoid McDonald’s Fate? Here’s How

The New Reality:  In the face of #MeToo, Steve Easterbrook, the highly successful McDonald’s chief executive, became the latest casualty. He was abruptly fired last week over a consensual relationship with a subordinate that the board decided violated company policy. McDonald’s standard of business conduct prohibited employees with “a direct or indirect reporting relationship” from “dating or having a sexual relationship.” McDonald’s HR chief also left the company.

Unfortunately for the company, they lost a CEO who had been credited with boosting McDonald’s out of the doldrums.

Prohibiting Dating?  Ironically, many organizations prohibit these kinds of interests in their general conflict of interest policies, rather than prohibiting dating, because of the laws in many states that limit a company’s ability to prohibit conduct outside the workplace that is otherwise legal activity. These laws were originally passed by the cigarette lobby to discourage businesses from firing employees who smoked outside the workplace. Thus, for example, if you see an employee on the news marching in a KKK parade or a Gay Pride event, you can’t terminate or discipline them for that activity alone in states with these laws. McDonald’s may have had a more express policy prohibiting dating itself.

The Power Differential:  “It is not appropriate to show favoritism or make business decisions based on emotions or friendships rather than on the best interests of the company,” McDonald’s policy states. Such policies underline the reality that relationships that appear consensual may not be if the power difference discourages an employee from rebuffing advances. Many employees may feel that they must engage in a sexual relationship in order to keep their job. In addition, a relationship that ends badly may result in harassment or retaliation. I have mediated or investigated several claims involving just such situations.

A Trail of Exits:  Easterbrook is just the most recent CEO to be fired under these circumstances. Last year, Intel’s chief executive, Brian Krzanich, resigned after the company discovered that he’d had a relationship with an employee – a violation of Intel’s “nonfraternization policy” — which applies to all managers.

While #MeToo has had the greatest impact on such exits, other companies have had similar issues over the years. In 2012, for example, Best Buy’s chief executive, Brian Dunn, resigned after engaging in what the company described as “an extremely close personal relationship with a female employee.”

Similarly, in 2005, Boeing’s chief executive, Harry Stonecipher, was forced to resign after he had a relationship with an employee. In many organizations, policies that apply to mid-level managers may be less severe, allowing such relationships if they are reported.

What Should You Do?

Avoiding the PR Nightmare:  If you want to avoid the bad press, financial fallout and productivity loss from these kinds of events, make sure that you pay attention to common sense prevention measures.

Train Hard:  In most organizations, harassment training is mandatory. Many executives, however, manage to escape, resulting in poor leadership modeling, as well as a lack of understanding by these leaders. While they may think they know everything about the issue so that they have no need to attend, in my experience, that is not the case.

Emphasize the Power Differential:  In both your trainings as well as policy considerations, make sure that you emphasize power. What a leader perceives to be a harmless pass may be interpreted very differently by an employee. The person who is lower down on the food chain may not believe that they can say no. The exec assumes consent where there may be none. In addition, consent may change over time. A relationship that started out as consensual may devolve into harassment or retaliation down the line. Managers who engage in relationships with subordinates put themselves in vulnerable positions.

For more information on these issues go to:
Why #MeToo Won’t Die and What to Do
Do You Know How Leaders Should Lead Through Biden, the #MeToo Movement and all the Rest of the Noise?
Lean Back? Are Most Male Managers Now Afraid to Mentor Women?
What Does #MeToo Mean For You as a Leader

What Do You Think?

Have you had experience with these kinds of situations? Call or write us at: 303-216-1020 or Lynne@workplacesthatwork.com