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McDonald’s Sues Former C.E.O. Steve Easterbrook

Eight months had passed since McDonald’s fired its chief executive, Steve Easterbrook, for sexting with a subordinate. Mr. Easterbrook had apologized and walked away with tens of millions in compensation, and the fast food chain had moved on under a new chief executive.

Then, last month, an anonymous tipster made a fresh allegation: Mr. Easterbrook had a sexual relationship with another McDonald’s employee while he was running the company.

On Monday, that accusation ignited a rare public war between a major company and its former leader: McDonald’s filed a lawsuit against Mr. Easterbrook, accusing him of lying, concealing evidence and fraud.

The lawsuit, filed in state court in Delaware, alleges that Mr. Easterbrook carried on sexual relationships with three McDonald’s employees in the year before his ouster and that he awarded a lucrative batch of shares to one of those employees. McDonald’s said it was seeking to recoup stock options and other compensation that the company last fall allowed Mr. Easterbrook to keep — a package worth more than $40 million, according to Equilar, a compensation consulting firm.

A lawyer for Mr. Easterbrook didn’t immediately respond to requests for comment on Monday morning.

The lawsuit represents an extraordinary departure from the traditional disclose-it-and-move-on decorum that American corporations have often embraced when confronted with allegations of wrongdoing by senior executives. More than a few chief executives in recent years have lost their jobs following allegations of sexual or other misconduct, but for the most part they have departed quietly and the companies haven’t aired the ugly details.

It also, however, raises new questions about how diligent McDonald’s was in looking into Mr. Easterbrook’s conduct before dismissing him with a generous compensation package. The lawsuit acknowledges, for instance, that the company’s initial review did not include a thorough search of the executive’s email account.

“One would think that it would be internal investigation 101 to look at all electronic records right away,” said Brandon L. Garrett, a professor who specializes in corporate criminal law at Duke University School of Law. “The concern, if an investigation doesn’t look at emails, is that it was a halfhearted investigation.”

In the #MeToo and Black Lives Matter eras, more companies are striving to position themselves as good corporate citizens, responsible not only to shareholders but also to customers, employees and society at large. Mr. Easterbrook’s successor at McDonald’s, Chris Kempczinski, has called for a new corporate emphasis on integrity, inclusion and supporting local communities.

“McDonald’s does not tolerate behavior from any employee that does not reflect our values,” Mr. Kempczinski wrote in an internal memo reviewed by The New York Times. He added, “As we recommit to our values, now, more than ever, is the time to lean in to what we stand for and act as a positive force for change.”

McDonald’s is among a tiny number of major companies to publicly — and with unconcealed anger — go after a recently departed chief executive. CBS’s firing of Leslie Moonves, in which the television company accused him of obstructing an internal investigation, is one of the few other examples. (Mr. Moonves claims he is entitled to a $120 million severance package. The dispute is now in arbitration.)

Until last fall, Mr. Easterbrook, a native of Watford, England, was regarded as something of a savior at McDonald’s. He had worked at the company for nearly two decades before taking its helm in March 2015. The fast-food chain was in a financial slump. Mr. Easterbrook streamlined its businesses, introduced technological innovations like touch-screen ordering and delighted customers by offering all-day breakfasts. The company’s shares roughly doubled during his tenure.

But in October 2019, the company was notified that Mr. Easterbrook had engaged in an inappropriate relationship with a McDonald’s employee. Mr. Easterbrook and the employee, who has not been publicly identified, told the company that the relationship was consensual and was not physical; it consisted of text messages and videos. Mr. Easterbrook assured the company’s outside investigators that he had never engaged in a sexual relationship with an employee.

The board of directors nonetheless decided to fire him. The question that the directors considered was whether he would be fired “for cause” — in other words, for an offense such as dishonesty or committing a crime. It was a crucial determination. If Mr. Easterbrook was fired for cause, he would have to relinquish previously awarded compensation, including stock options that he was not yet eligible to cash in.

McDonald’s said in its lawsuit on Monday that its board had feared that trying to fire Mr. Easterbrook for cause would be “certain to embroil the company in a lengthy dispute with him.” Instead, the board opted to ease Mr. Easterbrook out “with as little disruption as possible.”

The company allowed Mr. Easterbrook to keep his stock options and other compensation.

But McDonald’s severance plan, which the company said applied to Mr. Easterbrook, contained an important clause: If, in the future, McDonald’s determined that an employee was dishonest and actually deserved to be fired for cause, the company had the right to recoup the severance payouts.

Last month, after McDonald’s received the anonymous tip alleging that Mr. Easterbrook had had a sexual relationship with another employee, the company opened a new investigation.

In its review last fall, McDonald’s outside lawyers had only looked at messages that were on his company-issued mobile phone. And Mr. Easterbrook, according to McDonald’s lawsuit, had deleted certain emails from his phone.

This time, McDonald’s said, its investigators conducted a more detailed search, and in Mr. Easterbrook’s email account they found evidence of him carrying on sexual relationships with three employees in the year before his firing.

“That evidence consisted of dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees, that Easterbrook had sent as attachments to messages from his company email account to his personal email account,” McDonald’s said in the lawsuit. The company said the emails were sent in late 2018 and early 2019.

The company said the photographs constituted “undisputable evidence” that Mr. Easterbrook violated the company’s prohibition on having sexual relationships with subordinates and that he had lied to the investigators last fall.

While Mr. Easterbrook was having a sexual relationship with one of the employees, he awarded her hundreds of thousands of dollars’ worth of shares, the company said in its lawsuit.

“Had Easterbrook been candid with McDonald’s investigators and not concealed evidence, McDonald’s would have known that it had legal cause to terminate him in 2019,” the company said in its lawsuit.

In that case, Mr. Easterbrook would not have been entitled to retain his previously awarded compensation.

McDonald’s said on Monday that it was taking action to prevent Mr. Easterbrook from cashing in his stock options or selling his shares.

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McDonald’s Details What Dining In Will Look Like

Clean the digital kiosks each time a customer orders. Place “closed” signs on certain tables to promote social-distancing. Scrub the bathrooms every half-hour.

Those were among the instructions in a 59-page guide that McDonald’s recently distributed to franchisees outlining procedures for safely reopening the fast-food chain’s dining rooms across the country.

The guide — titled “The Dine-In Reopening Playbook” — does not outline a strict timeline, giving franchisees some discretion to decide when to reopen, according to a copy reviewed by The New York Times.

Once a local government says that restaurants can admit dine-in guests, a McDonald’s official in that region will decide whether reopening can begin, it says. Then individual franchise owners will make a decision about whether to go through with reopening.

So far, fewer than 100 McDonald’s locations have opened dining rooms in the states where that is already allowed. A McDonald’s spokesman, Jesse Lewin, said the company and its franchisees had been discussing reopening plans “for the last several weeks.” The company worked with epidemiologists as well as state and local health officials to assemble the guidelines, he said.

In addition to the rules about kiosks and bathrooms, the guide calls for all “high-touch” areas to be disinfected every 30 minutes and recommends putting signage on the floor to prevent customers from brushing past one another as they move around.

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Credit…Sarah Blesener for The New York Times

The details of the guide were earlier reported by The Wall Street Journal.

Unlike the small, independent restaurants that have been battered during the pandemic, McDonald’s was in a good position to weather the economic fallout. Its drive-throughs have stayed open, and they accounted for about two-thirds of the company’s revenue before the crisis.

But the company’s bottom line has still taken a hit. After reporting a decline in sales last month, the company’s chief executive, Chris Kempczinski, warned that “the exact trajectory of our recovery is highly uncertain.”

And workers and labor advocates have criticized the company for failing to provide sufficient protective equipment to employees working at the drive-throughs.

In the reopening guide, McDonald’s said it would require employees to have their temperatures taken before work, wear gloves and face masks, and wash their hands every hour.

“For dine-in orders, the bag will be placed on a clean sanitized tray and delivered to the customer while maintaining social-distance requirements,” the guide says. “Do not forget napkins and straws!”

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Credit…Erika P. Rodriguez for The New York Times

Virtually every restaurant owner in the United States — from Michelin-star chefs to fast-food executives — has been wrestling with how to make dining rooms safe in the coronavirus era. Some owners are planning to install plexiglass barriers between booths, while others are turning to paper menus and disposable cutlery.

McDonald’s is not the only fast-food chain moving closer to reopening. Restaurant Brands International, the parent company of Burger King and Popeyes, said this week that it would begin reopening dining rooms with a number of new safety precautions, including “beautiful tabletop signage” to indicate which tables are open.

The McDonald’s guide also includes a Q. and A. section on how to manage guests who refuse to comply with social-distancing guidelines.

“Always approach a situation calmly and treat everyone with respect,” the guide says. “Inform the guest: I apologize for any inconvenience, but to help keep everyone safe, we would like all our guests to maintain a safe distance of six feet from each other and our staff.”

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Credit…Gabriela Bhaskar for The New York Times

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First Quarter Earnings Were Terrible, But Executives Offer Some Hope

Companies releasing first-quarter results in recent weeks have detailed how the coronavirus pandemic is crushing their business, and many have gone so far as to stop offering forecasts for the rest of the year, claiming the future is just too uncertain.

Still, that didn’t stop some companies from pointing to glimmers of hope. Some senior executives said that business in April was slightly better than in the dark days of March as the virus quickly spread, leading to the deaths of thousands of people in the United States. Others tentatively outlined what a post-pandemic recovery might look like by pointing to how things were going in China, where the pandemic started and has since ebbed.

These shreds of optimism may have been an exercise in corporate spin, meant to reassure shareholders — or to tell them something many investors already appear to believe. The stock market has rebounded 27 percent from its March low as investors have become confident that the Federal Reserve and the Treasury Department will prevent the economy from going into a tailspin.

Though the most recent earnings reports were pretty awful, stocks did not crater, in part because Wall Street is expecting earnings to bounce back quickly. While analysts at Goldman Sachs expect the combined profits of S&P 500 companies to fall by a third this year, they expect them to surge next year to a level that exceeds what the companies made in 2019.

Government statistics and independent analysts paint a more dire picture. Economists expect the April unemployment rate to have hit about 16 percent, one of the highest on record, and up from 4.4 percent in March. Most important, the chances of an economic resurgence rest largely on whether the coronavirus pandemic will be contained as lockdowns are relaxed and not flare up again.

It is important to keep in mind that large companies, through hiring and investment, play a big role in the economy. Once big companies like Google, Ford Motor and Apple are confident about a recovery, their spending could make it so.

“The overarching theme is uncertainty,” said David Lefkowitz, an equity strategist at UBS Wealth Management. “That said, most companies are thinking the economy will reopen in stages, and on a region-by-region basis.”

Starbucks, for example, suspended its companywide profits forecast, but provided a bullish prediction about its business in China, where pandemic lockdowns are being lifted and nearly all its stores have reopened. The company says China could offer lessons about what might happen in the United States.

The coffee chain, which has long billed itself as a hub for social interactions, is expecting sales in China for the three months through the end of October — its fiscal fourth quarter — to be roughly in line with the same period in 2019. In the three months through the end of March, sales were down by half compared with the year-ago period. “We are leveraging our experience in China to inform our actions in other markets, including the U.S.,” Starbucks said in a statement.

Other executives are also seeing signs that customers want to get back to old habits. The chief executive of McDonald’s, Christopher J. Kempczinski, said there was a three-hour wait at one of its restaurants in France when it reopened. But overall, he sounded cautious on last week’s earnings call. “The exact trajectory of our recovery, however, is highly uncertain and dependent on many factors outside our control, such as government mandates, the risk of a second wave of infection to the availability of testing and the overall economic backdrop,” Mr. Kempczinski said.

He is hardly the only corporate executive who is unwilling or unable to predict when business will pick up.

Of the roughly 300 companies in the S&P 500 stock index that regularly provide an earnings forecast, 114 have not provided one for future profits, according to Savita Subramanian, an equity strategist at Bank of America Merrill Lynch. “A lot of corporates are using this as an opportunity to essentially go silent,” she said, “No one knows when we’re going to come back on line.”

Even Apple, one of the most profitable companies in the world, declined to provide a forecast.

Of course, for companies in the hardest-hit industries like airlines and logistics, the downturn could last a while and sales will not quickly snap back. “Historically, it has taken years, typically five or more, for business travel to recover,” Gary C. Kelly, chief executive of Southwest Airlines, said last week. Southwest was one of the companies that did not provide an earnings projection. Stock analysts expect the company to lose $3.86 per share this year, a sharp swing from a profit of $4.27 per share last year.

And FedEx might not report profits that match its 2019 haul until 2024, according to analysts that cover the package delivery giant. This would not be without precedent. After the financial crisis, Fedex’s earnings took seven years to return to their pre-2008 level. Unsurprisingly, FedEx has also stopped providing an earnings forecast.

In tough times, companies, hoping to conserve cash and shore up profit margins, cut spending in ways that can weigh on the economy. Ford has been doing that in China, including laying off thousands of workers. “The stark reality of a protracted global shutdown of our sector and our vertical has forced a laser focus on cost and liquidity,” James D. Farley, Ford’s chief operating officer, said last week. “And just as we did in China, we have ratcheted down spending across the board, both fixed and variable.”

Even Google, which has done relatively well during the pandemic, said it was paring the pace of its hiring.

Spending on new plants, buildings and technology, which can give a big lift to other parts of the economy, is another budget item that is getting chopped — even at technology companies that are profitable and have tens of billions of dollars in the bank. ­Facebook said last week that it expected capital expenditures this year of $14 billion to $16 billion, down from an earlier forecast of $17 billion to $19 billion.

Still, one promising sign highlighted by some executives is that the economy might quickly hit bottom, or may already have done so. In other words, things are bad but they don’t seem to be getting worse.

Mastercard, for example, said that U.S. transaction volume in the week ended April 21 was down 15 percent from the same period in 2019. Ordinarily that would be considered disastrous but it was an improvement from the 26 percent decline the week before.

“We believe we are currently in the stabilization phase in most markets,” said Ajay S. Banga, Mastercard’s chief executive, said last week.

Even companies in the health care sector, which is playing a central role in the pandemic, are hoping that conditions will return to normal in the coming weeks.

The pandemic has weighed on HCA, which operates over 300 hospitals and surgery centers. Many of them are in Texas and Florida, which have begun to open up. The company has said that elective surgeries, generally more profitable than other types of care, have been put on hold. But HCA’s chief executive, Samuel N. Hazen, told investors last month that its “reboot phase” would be finished across most of its operations by the end of June, and said the company is taking steps to make sure patients feel safe in hospitals, clinics and other health care facilities.

When asked by an analyst during a conference call, Mr. Hazen seemed upbeat about the loosening of lockdowns. “We’re excited about the reopening in Texas,” he said. “We’re excited about Tennessee, and we anticipate other states starting to relax some of these procedures and policies.”

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Drive-Throughs Are Now a Lifeline for Fast-Food Chains

For decades, the fast-food drive-through has been a greasy symbol of Americana, a roadside ritual for millions of travelers with a hankering for burgers and fries.

Now, the drive-through, with its brightly-colored signage and ketchup-stained paper bags, has taken on a new importance in the age of social distancing.

Over the last month and a half, the coronavirus pandemic has forced small, independent restaurants to close and Michelin star chefs to experiment with takeout. But despite the chaos, the nation’s drive-throughs have continued to churn out orders, providing a financial reprieve for chains like McDonald’s and Burger King even as fast-food workers have become increasingly concerned about the threat of infection.

While restaurant dining rooms sit empty, many people have started treating drive-throughs like grocery stores, making only occasional trips but placing larger orders. Popeyes has introduced “family bundles” to capitalize on the demand for bigger meals. Taco Bell is offering a promotion — free Doritos Locos Tacos on Tuesdays — that has increased traffic at some of its drive-throughs, overwhelming employees. And dine-in chains like Texas Roadhouse have converted empty parking lots into temporary drive-through lanes.

“For many restaurants, it’s an absolute savior,” said Jonathan Maze, the executive editor of Restaurant Business Magazine.

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Credit…Tag Christof for The New York Times
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Credit…Tag Christof for The New York Times

At many chains, including McDonald’s, the drive-through accounted for as much as 70 percent of revenue before the crisis, generating billions of dollars for the industry every month. During the pandemic, sales have mostly held steady. In March, drive-throughs generated $8.3 billion across the fast-food industry, an increase from $8 billion in sales over the same period in 2019, according to data from the NPD Group, a market research firm.

But while it has shielded fast-food companies from the worst economic effects of the pandemic, the drive-through has become a dangerous place for some low-wage workers, who cook and serve food in cramped conditions, often without access to protective equipment. In a number of states, workers at McDonald’s and other chains have staged walkouts and called for increased safety precautions.

Like other businesses that have remained open, drive-throughs are often tinged with fear. Some customers roll down their windows just far enough to stick out a pair of tongs. Others arrive armed with Lysol spray and plastic wrap.

“They’re just as scared of us as we are of them,” said Jamila Allen, 23, who works at a Freddy’s in North Carolina. An effort by McDonald’s locations in Los Angeles to lighten the mood of the workers with a calendar of ostensibly morale-boosting events like Crazy Sock Day was widely ridiculed as tone-deaf.

And despite repeated assurances from the major fast-food chains that gloves and face masks are on the way, anxious (and often mask-less) employees working at drive-throughs struggle to maintain social distance, even with fewer workers on each shift.

“It’s impossible to keep six feet apart in the workplace and definitely impossible to stay that far away from customers,” said Terrence Wise, 40, a shift manager at a McDonald’s in Kansas City, Mo. “If you’re taking a customer’s money and they cough or sneeze, you’re on alert and on edge.”

The Fight for $15 campaign, which works with fast-food employees to advocate a higher minimum wage, has identified dozens of McDonald’s workers in at least 14 states who have tested positive for the coronavirus. David Tovar, a McDonald’s spokesman, said the company has taken a range of steps to protect its work force, including putting up barriers and allowing employees to use trays to slide cash and food back and forth. “Customers can lift it off the tray themselves, so there’s no contact between the employee and the customer,” Mr. Tovar said.

Of all its rivals in the fast-food and casual dining business, McDonald’s was arguably in the best position to weather the pandemic. Over the last year, the company has spent hundreds of millions of dollars on its drive-throughs, installing digital menu boards that prod customers to place larger, more expensive orders. At some locations, McDonald’s has experimented with cameras that recognize license-plate numbers, allowing the company to tailor a list of suggested purchases from a customer’s previous orders.

During the pandemic, McDonald’s has made a handful of lower-tech adjustments, simplifying its menu to make lines move faster by cutting all-day breakfast and using only one type of lettuce. “The less choices you have for your crew to make, the more efficient and fast they can be,” Mr. Tovar said.

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Credit…Tag Christof for The New York Times
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Credit…Tag Christof for The New York Times

Taco Bell has also changed how it runs its drive-throughs. In the past, the company mostly filled relatively small orders. Now, customers are buying much larger meals — enough food to put leftovers in the refrigerator, according to Mike Grams, the chain’s chief operating officer.

“They’re locked up in their house, and so when they come out, and they go to a drive-through, they want to buy more,” Mr. Grams said.

To accommodate those new ordering habits, the company has moved its drive-through workers from the window to the now-vacant dine-in area, opening up space for cooks to assemble larger, more complicated orders in the kitchen.

But not every major chain has been able to come up with pandemic workarounds. Even before the coronavirus, chains like Ruby Tuesday and TGI Fridays, with large dining rooms designed for leisurely meals, had been struggling, closing locations as once-loyal patrons defected to faster, trendier options like Chipotle.

Without drive-throughs, these kinds of dine-in restaurants — many of which have taken on significant debt since the 2008 financial crisis — may struggle.

“We’ll see some large dining chains go under,” said Aaron Allen, a restaurant consultant. “It’ll finally be the death knell for them.”

Over the next year, food critics and industry experts say, the closures of large dine-in chains, mom-and-pop restaurants and fine-dining establishments could transform the restaurant industry, creating a more uniform, less vibrant landscape. The pandemic has exposed the gulf between the haves and have-nots, accelerating the demise of beloved but cash-strapped restaurants as the major fast-food chains continue to bring in revenue. Historically, recessions have benefited chains like McDonald’s and Burger King, which typically see higher sales when people are cutting back on spending.

Still, the pandemic has caused plenty of financial pain even for companies whose drive-throughs are humming. The chief executive of McDonald’s, Chris Kempczinski, has taken a 50 percent pay cut. After reporting a decline in sales on Thursday, Mr. Kempczinski warned that “the exact trajectory of our recovery is highly uncertain.”

And individual franchisees may also struggle, especially in the short term. In April, the National Owners Association — an advocacy group that represents some McDonald’s franchisees — clashed with the company over rent payments and other issues.

Over all, however, the corporate muscle of the big fast-food companies puts franchisees in an enviable position compared to most small businesses, especially independent restaurants. At Burger King and Popeyes, individual store owners have gotten help from corporate “franchisee liquidity teams” in applying for the loans under the government’s small-business relief program.

A provision in that program also allowed big chains like Shake Shack to secure loans, even as smaller restaurants with less experience handling complicated paperwork missed out on funds.

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Credit…Tag Christof for The New York Times
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Credit…Tag Christof for The New York Times

After it was criticized by lawmakers and restaurateurs, Shake Shack returned the $10 million loan it had gotten through the program. One reason the chain needed that money in the first place: It does not have any drive-throughs. In the next few years, industry experts say, more dine-in chains like Texas Roadhouse may begin experimenting with the format, given how necessary it has been during the coronavirus shutdown.

Ultimately, the pandemic could provide “a moment of redemption” for drive-throughs, said Adam Chandler, the author of “Drive-Thru Dreams,” a history of fast food.

Since it emerged in the 1950s, the format has faced criticism from public health officials and urban beautification campaigns, prompting cities like Minneapolis to ban the construction of new drive-throughs.

These days, however, the experience of ordering a burger from behind the steering wheel feels more like a reasonable safety precaution than a cold transaction.

And to some, it also feels refreshingly normal.

“It speaks to something that is extremely unremarkable,” Mr. Chandler said. “That you can do that at a time of enormous upheaval is meaningful. It’s poignant in this really chaotic moment.”

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As States Push to Reopen, Business Leaders Say Not So Fast

Companies in a handful of states have begun taking tentative steps to reopen stores, offices and factories that were closed by the coronavirus. Yet as the first employees and customers return, interviews with roughly 30 major employers show that businesses are confronting deep uncertainty, and many say it is simply too soon to come back.

Across the country, businesses are confronting a patchwork set of regulations that vary from state to state, and industry to industry. Government officials are sending mixed messages about who should open. The thousands of companies that never shut down — like pharmacies, grocery stores and auto repair shops — are using different techniques to promote social distancing and ensure good hygiene. And some businesses that could be getting back to work are declining to do so, fearful that reopening too soon could fuel a new wave of infections and lead to another round of closings.

“Shutting down was hard, but opening up is going to be harder,” said Rich Lesser, chief executive of the Boston Consulting Group. “This is the multi-trillion dollar question.”

Governors in states like South Carolina and Georgia have encouraged businesses to reopen in recent days. Dick’s Sporting Goods, which had shut all its locations around the country, reopened its 12 stores in South Carolina last week.

But others, both large and small, were more cautious. Coca-Cola, an influential mainstay of Atlanta’s business community, said last week that most of its office workers would continue to work remotely for the time being. Life Time, a chain of gyms that had planned to open its six locations in Georgia on Friday, reversed course.

“I can’t risk the health of the members at the risk of the community for the sake of them pumping some iron,” Bahram Akradi, Life Time’s chief executive, said.

But in Tennessee, which is loosening restrictions, Volkswagen has called 3,800 employees back to work at its plant in Chattanooga starting May 3 after spending weeks putting new health and safety measures in place, making the company one of the first major automakers to restart manufacturing since much of the industry shut down.

And in Washington State, Boeing reopened a factory that had closed after several workers fell ill with the virus. About 27,000 Boeing employees returned to their jobs last week, working in staggered shifts in facilities outfitted with hand washing stations, cleaning supplies and signs and floor markings reminding them to keep their distance from one another. Some employees were being asked to submit to voluntary temperature checks, and those who need it will be provided with protective gear.

Many companies that could have workers in the office are choosing to keep them at home. At Morgan Stanley, which as a bank is designated an essential service, more than 90 percent of employees are working remotely. Gap Inc., which also owns Banana Republic, Athleta and Old Navy, said that it did not have plans to reopen stores in South Carolina, Georgia and Tennessee in coming days.

“Taking care takes time,” Gap’s spokeswoman, Sandy Goldberg, said in an email. “We are closely monitoring the situation and will open our stores when we feel it is safe to do.”

A chief concern among corporations is that in reopening too soon, they could contribute to the spread of the virus, potentially triggering another round of business closures in the weeks or months ahead.

“It’s hard enough to shut an economy down once,” Mr. Lesser said. “Having to do it twice carries far greater damage.”

For companies considering reopening locations that have been closed, the complications are daunting and complex. They need only look at businesses that have remained open for a glimpse of the challenges they would face.

Home Depot distributed thermometers to its store workers and is asking them to take their temperature before they arrive for work, and to stay home if they have a fever. McDonald’s is having restaurant workers sign waivers certifying that they are healthy before starting a shift. CVS and Goldman Sachs said they were looking into screening their employees for the virus, but couldn’t get access to tests, and didn’t want to jump ahead of health care workers.

“As keen as companies are to reopen, they are quick to say that if their employees don’t feel safe, they are not going to come back in to work,” said Josh Bolten, chief executive of the Business Roundtable. “And if customers don’t feel safe, they’re not going to come back into stores.”

Among the biggest hurdles to a broader reopening of the economy was the continued need for more testing. On a call this month between Mr. Trump and business leaders, several chief executives, including Jeffrey P. Bezos of Amazon, said that more testing was needed before the economy could reopen.

With the availability of tests still badly lagging, many of the country’s largest employers are declining to restart operations even when they can. General Motors, Ford Motor and Fiat Chrysler — which voluntarily closed factories — have not yet called factory workers back, and continue to negotiate with the United Automobile Workers union over safety measures.

Macy’s and other department stores remain closed, with no immediate plans to reopen in states that are lifting restrictions. Movie theater chains like AMC have no intention of opening soon in those states, either. At JPMorgan Chase, deemed an essential service provider, executives have not yet set a timetable for returning remote workers to corporate offices in New York and other affected cities.

Virtually every restaurant owner in the United States — from Michelin star chefs to fast food executives — is wrestling with how to make dining rooms safe when they do eventually reopen.

Some owners are planning to install plexiglass barriers between booths. Others are focused on creating safe passageways through their restaurants, separating the exit from the entrance so that customers do not brush past each other on the way in or out. Still others are turning to paper menus and disposable cutlery.

“It’s a heavy lift to open back up,” said Larry Lynch, senior vice president of science and industry at the National Restaurant Association. “It’s not just flip the switch and we’re open.”

McDonald’s has shut its dining rooms across the country and had no immediate plans to open them in states where governors are calling on businesses to reopen. Instead, the company is sticking with drive through, delivery and take-out service for now.

McDonald’s said it was distributing more than 100 million masks to employees, and is having workers wear gloves, wash their hands more frequently and monitor their own health. Senior executives are meeting “three times a day to evaluate policies and procedures,” and the company has formed “a task force with franchisees to evaluate the reopening of the dining rooms.”

Restarting operations is likely to be a monthslong process for most companies that will proceed in fits and starts.

Having delayed plans to reopen his six Atlanta-area locations in Georgia, Mr. Akradi, the chief executive of Life Time, is planning to distribute questionnaires to its members to get a better sense of their interest in returning to the gym.

“We want to do it when it’s totally safe, when the customers feel safe,” Mr. Akradi said. “If they feel like we’re being irresponsible, then we have damaged our brand.”

To prepare for locations to reopen, Mr. Akradi is equipping employees with masks, rags, and cleaning products. In addition, he is awaiting the arrival of 12,000 antibody tests to offer to the company’s 38,000 employees.

“The worst thing we can do is reopen without a plan and have to go through another phase of shutdown,” Mr. Akradi said. “The economy cannot withstand another phase of shutdown.”

Niraj Chokshi, Sapna Maheshwari, Neal E. Boudette and Kim Severson contributed reporting.

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Some Companies Seeking Bailouts Had Piles of Cash, Then Spent It

Last month, the top executives of KFC, Wendy’s, Papa John’s and other large restaurant chains held an urgent call with President Trump about the coronavirus crisis.

The companies needed billions of dollars in aid to avoid mass layoffs, the executives said. The next day, their trade group asked government leaders, including Mr. Trump, for $145 billion in relief.

These companies had been highly profitable in recent years, yet they were seeking help from the federal government. Where had all their money gone? Like much of corporate America, the restaurant chains had spent a large chunk on buying back their own stock, a practice aimed at bolstering its price. Some were even more vulnerable to the economic shock because they had previously increased their borrowing — including to fund buybacks or pay dividends — and strained their credit in the process.

Few, if any, corporations could have been adequately prepared for this pandemic, and efforts to stem the spread of Covid-19 have hit certain industries particularly hard — especially restaurant companies that have been forced to close most of their locations.

Still, the crisis has exposed the potential failings of a strategy embraced by many big companies: aligning their priorities with the interests of shareholders, many of whom are narrowly focused on the performance of a company’s shares. Shareholders, wanting stock prices to go higher, pushed management to use up cash on buybacks and dividends. And senior executives, paid largely in stock and on the basis of how the stock performed, were happy to oblige. The result was that companies often didn’t have much spare cash, leaving them even more exposed to economic downturns.

“They should have built up some buffers against such sudden shocks and risk,” said Willi Semmler, an economics professor at the New School for Social Research in New York.

In the three years through 2019, spurred on by Mr. Trump’s tax cuts, companies in the S&P 500 stock index spent $2 trillion on buybacks, 30 percent more than what they spent over the previous three years, according to an analysis of data from CapitalIQ. Including dividend payments, S&P 500 companies spent $3.5 trillion in the most recent three years — an amount that was equal to their net income for the period.

Regulatory requirements prescribe how much cash banks and insurers need to hold, but there are few such rules for other companies.

They spend their cash as they see fit — on acquisitions, capital expenditures, payroll and, of course, buybacks and dividends. The more money a company spends buying back its shares, the less it has for other uses, making the practice controversial. Some giants, including Apple and Facebook, are sitting on mountains of cash despite intense criticism from investors who say the companies have a responsibility to return that cash to shareholders. But most don’t need to be prodded.

Over all, S&P 500 companies now have a smaller cash buffer to support their borrowing than they did nine years ago, according to one widely used measure: net debt to EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. The higher the ratio, the less cash the company has on hand and coming in to pay its debts. It was 1.8 as of March 30, according to FactSet, significantly higher than it was a year before the 2008 financial crisis.

The big-business trade group, the Business Roundtable, has long argued that distributing cash through buybacks helps improve the general economy by giving money to enterprising investors who can put it to use elsewhere.

“People act like buying back stock is a bad use of capital. No, it’s not,” JPMorgan Chase’s chief executive, Jamie Dimon, said at a Business Roundtable event in Washington in December 2018. “You buy back stock, that’s a redeployment of capital to a better and higher use.” He added that it was “beneficial for all of America.”

The investor Warren E. Buffett, whose company, Berkshire Hathaway, is known for its enormous cash pile, has also said stock repurchases are fine as long as a company “has ample funds to take care of the operational and liquidity needs of its business.”

Zion Research, which analyzes stocks for investors, recently ranked companies that pushed their stock buybacks to a point where any financial weakness might limit their ability to continue those programs. American Airlines and Boeing — both in line for taxpayer bailouts — were at the top.

“You look at some of the companies that are struggling and are potentially in need of the most help — they’d love to have some of that capital right now,” said David Zion, founder of the firm.

In the past five years, American Airlines spent $13 billion on stock buybacks and dividends, and Boeing nearly $53 billion. American could receive as much as $10.6 billion in grants and loans from the Treasury. The stimulus bill that Congress passed last month provides as much as $17 billion for companies considered crucial to national security, a category dominated by Boeing.

The restaurant industry lived particularly close to the edge.

During the five years that ended in 2019, McDonald’s and Yum Brands, which operates KFC and Taco Bell, made payments to shareholders that were equivalent to a third of the $145 billion in pandemic relief that the industry requested, an analysis by Hindenburg Research for The New York Times found. The industry did not secure the money it sought, but individual restaurant owners are expected to get funds from government programs.

Well before the pandemic, Yum repeatedly flagged the mass spread of diseases as a top “risk factor” in its annual reports, warning over a year ago that such outbreaks could “severely disrupt” operations and harm its business and finances.

Yum also returned cash to its shareholders, paying $15 billion to investors in buybacks and dividends over the past five years. And it didn’t just spend profits to make the payments; it borrowed to finance them. At the end of last year, Yum’s debt was more than twice the size of its assets, according to Hindenburg — a huge leap from 40 percent of assets five years earlier. During the same period, the compensation of Greg Creed, its recently retired chief executive, totaled $66 million.

To have more cash on hand during the pandemic, the company this month issued $600 million in bonds whose interest rates were almost twice what the company previously paid. It also drew $525 million from an existing credit line last month.

Virginia Ferguson, a representative for Yum, said a change in the structure of its business and the strong performance of its restaurants had provided much of the cash to pay for buybacks. The use of extra debt to fund the purchases was “measured,” she said in an email.

Yum, which said last month that it had suspended its buyback program, did not request government funds for itself, Ms. Ferguson said. She added that the small businesses that run Yum franchises would qualify for government relief. Owners of franchises in chains like Yum’s and McDonald’s can apply for aid made available through the legislation passed last month in response to the pandemic.

“McDonald’s Corporation has not, and will not, ask for assistance from any government entity, nor seek any deferral of our tax payments,” said Michael Gonda, a company spokesman. He said the company had halted share buybacks, cut spending by $1 billion and borrowed more money.

The situation is dire for some restaurant companies that pushed the financial envelope.

Dave & Buster’s, a chain of game-filled restaurants, warned this month that with all its locations closed, there was “substantial doubt” that it could remain a going concern. The company spent $627 million on stock buybacks and dividends in its last three fiscal years, nearly twice its net income for the period.

At the start of February, Dave & Buster’s had 15,908 employees. Because of the pandemic, all but 165 are on furloughs. In the annual report from a year ago, the company flagged the risk of illnesses, though it was not identified as a prominent risk factor.

Last week, Dave & Buster’s issued new stock to help it absorb the shock of the pandemic but did not disclose how much it had raised. The company declined to comment.

Investors, especially large asset managers, like BlackRock and Vanguard, that own big stakes in companies, could prod management to prepare for future pandemics. BlackRock’s chief executive, Laurence D. Fink, has warned about “short-termism,” writing in 2015 and 2017 annual letters that too many companies were failing to put money into research or expand their work forces for long-term growth. But Mr. Fink’s concern was limited to whether companies were leaving themselves enough cash to grow, and not whether they were prepared for unforeseen calamities.

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Franchise Workers Lose Some Power to Challenge Labor Practices

The National Labor Relations Board announced a new regulation on Tuesday that makes it harder to challenge companies over their labor practices, potentially affecting the rights of millions of workers.

The rule, which will take effect on April 27, scales back the responsibility of companies like McDonald’s for labor-law violations by their franchisees, such as firing workers in retaliation for attempts to unionize. The rule also applies to workers employed through contractors like staffing agencies or cleaning services.

That is a reversal of the doctrine that the board adopted late in the Obama administration, which had made it possible to deem a much wider range of parent companies to be so-called joint employers.

“This final rule gives our joint-employer standard the clarity, stability and predictability that is essential to any successful labor-management relationship and vital to our national economy,” John F. Ring, the board’s chairman, said in a statement.

The Obama-era standard, established in 2015, said a parent company could be considered a joint employer of workers at a franchisee or contractor even if it controlled those employees only indirectly. For example, a company could be a joint employer if it required franchisees to use software that imposed certain scheduling practices. The parent company could also be considered a joint employer if it had a right to control the franchisee’s employees even if it hadn’t exercised that right.

Under the new rule, the parent company will share liability for violations committed by contractors or franchisees only if the parent has substantial, direct and immediate control over the other companies’ employees — including their pay, benefits, hours, hiring, firing or supervision.

In the case of fast-food franchises, the parent company would probably have to directly determine scheduling practices, and perhaps other working conditions, to be considered a joint employer.

The new rule could also make it more difficult for employees of contractors and franchisees to unionize. A parent company that chooses to shut down a franchise when employees of that franchise are seeking to unionize is likely to face legal risk only if it is deemed a joint employer. Workers and union officials have sometimes accused parent companies of this tactic, though the companies and industry associations have denied that this happens.

A parent company that is considered a joint employer typically must also bargain with workers at a franchisee or contractor if they form a union, a requirement that the new rule will help many parent companies avoid.

In explaining the rationale for the new rule, the agency said in a statement that it sought to return to the joint-employer doctrine that prevailed for decades before 2015, except “with the greater precision, clarity and detail that rule-making allows.”

But the new rule could make it even less likely for companies to be deemed joint employers than before 2015 because it adds the word “substantial” to the words “direct and immediate” in describing the form of control that determines that status.

In January, the Labor Department announced a similar rule effectively making it more difficult to hold parent companies liable for minimum wage and overtime violations committed by franchisees.

The labor board, which gained a Republican majority in 2017, first sought to reverse the Obama-era standard in a ruling late that year. But the board voted to vacate that ruling after its inspector general found that a Republican board member had a potential conflict of interest and should not have taken part.

After that reversal, the board took a new tack. Instead of trying to change the Obama-era standard by deciding cases involving specific employees and employers, it decided to issue a regulation that would apply to all employees and employers in these kinds of work arrangements.

Philip A. Miscimarra, who was the board’s chairman during its first effort to reverse the Obama-era policy in 2017 and left soon after, said that it was appropriate for the agency to address the issue through a new regulation. “The board clearly has statutory authority to adopt regulations, and rule-making can provide more certainty in this important area for employees, unions and employers,” Mr. Miscimarra said in an email.

Critics of the board, however, argued that the agency was doing whatever it could to achieve a desired policy outcome.

“After getting caught violating ethics rules the first time, Republicans on the board are now ignoring these rules and barreling towards reaching the same anti-worker outcome another way,” Senator Elizabeth Warren, the Massachusetts Democrat who is running for president, said in a statement when the board proposed its new rule in September 2018.

Wilma B. Liebman, who served as chairwoman under President Barack Obama, said pro-worker groups were likely to challenge the new rule in court. She said they could argue that the “blatant effort to evade the same conflict of interest problem” that plagued the initial attempt to reverse the Obama-era approach could also undermine the new rule.

The board member who the inspector general said had a potential conflict in the adjudication, William J. Emanuel, also had a role in proposing the rule. Mr. Emanuel’s former law firm had represented a party in the case that led the Obama labor board to hand down its joint-employer ruling in 2015.

Ms. Liebman said opponents could also argue that the board had not seriously considered alternatives and objections, something required by law, and noted that the new rule defied a federal appeals court decision largely upholding the Obama-era doctrine.

The board rejected such allegations in material it included with the new rule, citing court precedent that it said made clear that Mr. Emanuel did not have to recuse himself, and saying it had revised its initial proposal in response to the nearly 29,000 public comments. “Throughout this rule-making process, the board has been willing to reconsider the preliminary views expressed,” the agency said.

Michael J. Lotito, a lawyer who represents employers at the firm Littler Mendelson, said the board had devised the rule with an eye toward accommodating the appeals court decision by allowing indirect control of workers to be a factor in determining joint employment, just not one that could trigger the status on its own. But Ms. Liebman questioned whether courts would accept that argument.

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New Rule Makes It Harder to Challenge Labor Practices

The National Labor Relations Board announced a new regulation on Tuesday that makes it harder to challenge companies over their labor practices, potentially affecting the rights of millions of workers.

The rule, which will take effect on April 27, scales back the responsibility of companies like McDonald’s for labor-law violations by their franchisees, such as firing workers in retaliation for attempts to unionize. The rule also applies to workers employed through contractors like staffing agencies or cleaning services.

That is a reversal of the doctrine that the board adopted late in the Obama administration, which had made it possible to deem a much wider range of parent companies to be so-called joint employers.

“This final rule gives our joint-employer standard the clarity, stability and predictability that is essential to any successful labor-management relationship and vital to our national economy,” John F. Ring, the board’s chairman, said in a statement.

The Obama-era standard, established in 2015, said a parent company could be considered a joint employer of workers at a franchisee or contractor even if it controlled those employees only indirectly. For example, a company could be a joint employer if it required franchisees to use software that imposed certain scheduling practices. The parent company could also be considered a joint employer if it had a right to control the franchisee’s employees even if it hadn’t exercised that right.

Under the new rule, the parent company will share liability for violations committed by contractors or franchisees only if the parent has substantial, direct and immediate control over the other companies’ employees — including their pay, benefits, hours, hiring, firing or supervision.

In the case of fast-food franchises, the parent company would probably have to directly determine scheduling practices, and perhaps other working conditions, to be considered a joint employer.

The new rule could also make it more difficult for employees of contractors and franchisees to unionize. A parent company that chooses to shut down a franchise when employees of that franchise are seeking to unionize is likely to face legal risk only if it is deemed a joint employer. Workers and union officials have sometimes accused parent companies of this tactic, though the companies and industry associations have denied that this happens.

A parent company that is considered a joint employer typically must also bargain with workers at a franchisee or contractor if they form a union, a requirement that the new rule will help many parent companies avoid.

In explaining the rationale for the new rule, the agency said in a statement that it sought to return to the joint-employer doctrine that prevailed for decades before 2015, except “with the greater precision, clarity and detail that rule-making allows.”

But the new rule could make it even less likely for companies to be deemed joint employers than before 2015 because it adds the word “substantial” to the words “direct and immediate” in describing the form of control that determines that status.

In January, the Labor Department announced a similar rule effectively making it more difficult to hold parent companies liable for minimum wage and overtime violations committed by franchisees.

The labor board, which gained a Republican majority in 2017, first sought to reverse the Obama-era standard in a ruling late that year. But the board voted to vacate that ruling after its inspector general found that a Republican board member had a potential conflict of interest and should not have taken part.

After that reversal, the board took a new tack. Instead of trying to change the Obama-era standard by deciding cases involving specific employees and employers, it decided to issue a regulation that would apply to all employees and employers in these kinds of work arrangements.

Philip A. Miscimarra, who was the board’s chairman during its first effort to reverse the Obama-era policy in 2017 and left soon after, said that it was appropriate for the agency to address the issue through a new regulation. “The board clearly has statutory authority to adopt regulations, and rule-making can provide more certainty in this important area for employees, unions and employers,” Mr. Miscimarra said in an email.

Critics of the board, however, argued that the agency was doing whatever it could to achieve a desired policy outcome.

“After getting caught violating ethics rules the first time, Republicans on the board are now ignoring these rules and barreling towards reaching the same anti-worker outcome another way,” Senator Elizabeth Warren, the Massachusetts Democrat who is running for president, said in a statement when the board proposed its new rule in September 2018.

Wilma B. Liebman, who served as chairwoman under President Barack Obama, said pro-worker groups were likely to challenge the new rule in court. She said they could argue that the “blatant effort to evade the same conflict of interest problem” that plagued the initial attempt to reverse the Obama-era approach could also undermine the new rule.

The board member who the inspector general said had a potential conflict in the adjudication, William J. Emanuel, also had a role in proposing the rule. Mr. Emanuel’s former law firm had represented a party in the case that led the Obama labor board to hand down its joint-employer ruling in 2015.

Ms. Liebman said opponents could also argue that the board had not seriously considered alternatives and objections, something required by law, and noted that the new rule defied a federal appeals court decision largely upholding the Obama-era doctrine.

The board rejected such allegations in material it included with the new rule, citing court precedent that it said made clear that Mr. Emanuel did not have to recuse himself, and saying it had revised its initial proposal in response to the nearly 29,000 public comments. “Throughout this rule-making process, the board has been willing to reconsider the preliminary views expressed,” the agency said.