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Teamsters Pension Funds Sue McDonald’s over Alleged Sexual Misconduct

Lawsuit claims that such behavior is widespread throughout the burger chain, and points to defenestrated CEO.

By Larry Light


McDonald’s just got sued by three Teamsters pension funds, which charged that the fast food chain permits sexual harassment and gender discrimination.

This latest development follows the company’s legal move Monday to recover the fat exit package paid to ousted CEO Steve Easterbrook. He lost his job after allegations surfaced that he had a non-physical sexting relationship with an employee.

Now, the company is suing him for the $40 million back, claiming that he had actual affairs with three subordinates, which he kept from the board. The Teamsters’ funds cited the Easterbrook problem as evidence of sexual misconduct coming from the top down.

The Teamsters’ action, in Delaware Chancery Court, contended that misconduct was widespread at the burger giant. “McDonald’s suffers from a toxic work culture marked by sexual harassment, bullying, and abuse of the company’s female employees at the hands of their supervisors, co-workers, and customers,” the complaint declared. “That offensive behavior reaches even the most vulnerable group—teenage female workers.”

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The lawsuit detailed “countless stories” of an “intimidating, hostile, and offensive work environment, in which female workers are regularly subjected to groping, physical assaults, sexually charged crude jokes, and epithets.”

The company said in a statement to Bloomberg News that it “had been working cooperatively with the plaintiffs and had already offered to make documents available.”

“We are not sure why the plaintiffs saw a strategic advantage to filing a lawsuit rather than continuing our discussions, but we will now respond to the lawsuit through the appropriate channels,” the McDonald’s statement said.

The Teamsters lawsuit pointed to news reports and court records to show that the “widespread misconduct” has “persisted for at least a decade” at “all corporate levels, including within the company’s highest ranks.”

It stated that there were a dozen U.S. Equal Employment Opportunity Commission complaints filed in 2016 alone, plus a $500 million class action suit brought in April, alleging “systemic sexual harassment.”

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Home > News > Pensions > Multiemployer Plans See Wild Funding Swings in First Half
Pensions

Multiemployer Plans See Wild Funding Swings in First Half

Funded levels fluctuated from 85% down to 72% and back up to 82% during first six months of the year.

By Michael Katz


Increased market volatility has led to dramatic swings in the funded levels for most US multiemployer pension plans over the past six months, according to consulting firm Milliman.

As of the end of June, the aggregate funded shortfall for US multiemployer pension plans widened by an estimated $26 billion to lower their aggregate funded percentage to 82% from 85% at the end of 2019, according to Milliman’s Multiemployer Pension Funding Study (MPFS).

Milliman noted that although all pension plans absorb market gains and losses over time, extreme market movements just before a plan’s measurement date can have a significant impact on its funding position and annual Pension Protection Act (PPA) zone status.  

“The past six months have demonstrated why measurement dates matter,” Nina Lantz, a principal and consulting actuary at Milliman and co-author of the MPFS, said in a statement. Lantz added that while the firm’s year-to-date loss on its simplified portfolio is now 1.3%, the loss was approximately 13.4% as of March 31.

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“So the 70 plans in the MPFS with that [March 31] year-end date will complete their annual valuations and zone certifications when 2020 asset values are at their lowest for the year so far,” Lantz said. “This will unfortunately affect their funding position and zone status, despite the current market recovery in Q2 2020.”  

Milliman estimates that the plans’ funding shortfall as of March 31 was approximately $200 billion with a funded status of 72%. It also said that plans in critical and declining status continue to see their funded statuses erode over time despite the market’s recovery. The firm attributed this to shifts in policy to invest in safer, lower-returning assets to try to preserve capital for as long as possible. It also said the funded percentage of noncritical and declining plans continues to be “almost entirely driven by investment performance.”

With Congress passing stimulus legislation to help the economy and provide financial assistance to unemployed Americans, Milliman said “the plight of multiemployer plans” has not gone unnoticed, with the House passing the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which contains proposals to address the challenges for multiemployer plans.

“The market volatility associated with the COVID-19 pandemic and the slow and inconsistent nature of states reopening from the shutdown leaves the future of multiemployer plans in a tenuous position,” said Milliman in its June MPFS. “The last six months have been extremely turbulent and, while the market has recovered some, there remains considerable economic and political uncertainty ahead.”

Related Stories:

Multiemployer Pension Funding Reaches Pre-Financial Crisis Levels

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Senators Unveil Plan to Bolster Multiemployer Pension System

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