Former McDonald’s chief Stephen Easterbrook’s alleged dalliances with employees are proving to be expensive.

First, Easterbrook agreed to give back $105 million to the Golden Arches over claims that he hid sexual relationships with colleagues from the company. Then, earlier this month, he agreed to pay $400,000 and accept a five-year officer and directorship ban to settle Securities Exchange Commission claims that he misled shareholders about the situation.

McDonald’s isn’t the only company that explicitly bans executives from having romantic relationships with subordinates. Even trysts that appear to be consensual initially may look very different when the connection sours, particularly if there’s an imbalance in the power dynamic.

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At Airbnb, we required executive team members to forego romantic relationships with co-workers entirely. The policy established a clear, shared commitment and understanding, which can help avoid problems down the road.

General counsel at companies without such policies on the books may want to reconsider, given the changing landscape of sexual harassment law and the increasing risks for officials who engage in romantic encounters with employees.

Shifting Landscape

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