McDonald's first learned about former CEO Steve Easterbrook's relationship with an employee roughly three weeks ago, The Wall Street Journal reported.

The Chicago-based company announced on Sunday that its board ousted Easterbrook for having a consensual relationship with a female employee, a violation of the company's nonfraternization policy. Chris Kempczinski, formerly McDonald's U.S. president, is the chain's new chief executive.

People familiar with the matter told the Journal that the company's general counsel, Jerry Krulewitch, informed McDonald's board about the matter after an internal investigation. The board hired a law firm, Wachtell, Lipton, Rosen & Katz, to assess the legal risk, it reported.

The board concluded that the relationship between Easterbrook and the employee was short term and consensual, according to the newspaper. However, it also raised questions about his judgment in the board's view, one person familiar with the matter told the Journal.

McDonald's declined to comment on the report.

Read more about the company's investigation of Easterbrook here.

— CNBC's Kate Rogers contributed to this report.