McDonald’s Ex-CEO Hit with Non-Compete Agreement

Earlier this month McDonald’s announced suddenly that the board had voted to terminate CEO Steve Easterbrook due to a consensual relationship with another McDonald’s employee. The day after firing Easterbrook, McDonald’s outlined the terms of Easterbrook’s severance package in a filing with the Securities Exchange Commission. Easterbrook will receive 26 weeks of salary as severance, totaling at least $675,000 before benefits. In addition, he will be eligible for a prorated bonus if McDonald’s hits its performance targets for 2019.

The severance agreement also includes several restrictive covenants including a strict non-compete provision prohibiting Easterbrook from working for any fast-food competitor and at least two convenience store chains for the next two years. The agreement provides that:

“You acknowledge and agree that, in performing services for McDonald’s, you were placed in a position of trust with McDonald’s and that, because of the nature of the services provided by you to McDonald’s, Confidential Information will become engrained in you, so much so that you would inevitably or inadvertently disclose such information in the event you were to provide similar services to a competitor of McDonald’s.

“As such, you agree and covenant that for a period of two (2) years following your Termination Date: (a) you shall not either directly or indirectly, alone or in conjunction with any other party or entity, perform any services, work or consulting for one (1) or more Competitive Companies (as defined below) anywhere in the world; and (b) you shall not perform or provide, or assist any third party in performing or providing, Competitive Services anywhere in the world, whether directly or indirectly, as an employer, officer, director, owner, employee, partner or otherwise, of any person, entity, business, or enterprise.”

The SEC filing goes on to provide a non-exhaustive list of 36 fast-food and pizza chains that would be considered “Competitive Companies” under the agreement. This list includes:

Arby’s

Bojangles’

Burger King/Hungry Jack’s

Caffè Nero

Checkers

Chick-fil-A

Chipotle

Costa

Culver’s

Denny’s

Domino’s Pizza

Dunkin’ Brands

Five Guys

Gregg’s

Hardee’s

In-N-Out Burger

Jack in the Box

Jamba Juice

Long John Silver’s

Quick Service Restaurant Holdings (and all its brands and subsidiaries)

Panera Bread

Papa John’s

Popeyes Chicken

Potbelly

Qdoba

Quiznos

Sonic

Starbucks

Subway

Tim Hortons

Wawa

Wendy’s

Yum Brands (including but not limited to Taco Bell, Pizza Hut, Kentucky Fried Chicken, and all its subsidiaries)

The list, interestingly, also includes convenience store chains: 7-Eleven and Wawa.

Generally under Illinois law, non-compete agreements for a duration of two years or less are considered reasonable, provided that the person is not completely restricted from performing their trade. When courts determine the enforceability of restrictive covenants, they look at the totality of circumstances which includes several factors, including the duration, geographic scope, and the need to protect a legitimate business interest.

Whether you are a business owner who is or is considering asking workers to sign a non-compete or non-solicitation agreement or a worker being asked to sign such an agreement, it is always advisable to seek the assistance of an attorney experienced in non-compete law. The Elmhurst and Oak Brook non-compete agreement attorneys at Lubin Austermuehle are among the best non-compete attorneys in the Chicagoland area with over thirty years of experience defending and prosecuting non-compete agreements and unpaid wages and a wide variety of other business dispute lawsuits arising between physicians in the same medical practice. Lubin Austermuehle a firm of Chicago business dispute attorneys handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat.

Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Evanston and Skokie business dispute and restrictive covenant lawyers, civil litigation lawyers, and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely-held businesses and employee breaches of fiduciary duty. We also assist Chicago, Cook, and DuPage County area businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0333 or our toll-free number (833) 306-4933. You can also contact us online here.

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