Severance Agreements

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In 2019, McDonald’s Corporation fired its CEO Steve Easterbrook after it learned he had an inappropriate relationship with a subordinate employee. The relationship came to light when the subordinate employee reported that she engaged in a consensual relationship with Easterbrook that involved explicit text messages and photographs, but no physical contact.  Naturally, McDonald’s investigated the…

On August 10, 2016, the Securities and Exchange Commission issued a cease and desist order against BlueLinx Holdings, Inc. that further demonstrates the scrutiny of various federal agencies with respect to severance agreements.

In BlueLinx, the SEC found a provision in a severance agreement that restricted employees from providing information to the SEC without company…