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Papa John v. Papa John's: Founder and Ousted CEO Sues Company

By Christopher Coble, Esq. on August 01, 2018 | Last updated on March 21, 2019

Former Papa John's CEO John Schnatter is suing the pizza chain he founded following his ouster last month. Schnatter had already stepped down as CEO in January, after blaming poor sales on the NFL for not adequately responding to player protests during the national anthem. Then, while on a July conference call with a public relations firm hired to help the company refurbish its image, Schnatter complained, "Colonel Sanders called blacks n*****s and Sanders never faced public outcry."

The PR firm quickly terminated the contract, Schnatter was removed as chairman of Papa John's board, and he also stepped down from the University of Louisville's board of trustees. Now the man suing his former company, walking back his admission to using a racial slur, alleging he was ousted in a "heavy-handed way," and claiming that his replacement is not the right man for CEO. So, in honor of Schnatter's current legal battle with Papa John's, here's a roundup of some of the company's prior litigation.

1. Papa John's Receipt Fiasco: When a Company's Racist Act Goes Viral

Back in 2012, a Papa John's store employee typed out a customer's name was "lady chinky eyes" on her receipt. That customer, communications manager for an investigative journalism non-profit Minhee Cho, tweeted a picture of the offending receipt. And although Cho declined to file a lawsuit, the company apologized on Twitter and the store owner terminated the employee and conducted sensitivity trainings.

2. Papa John's Lawsuit Seeks $250M for Spam Texts

Later that same year, Papa John's did get sued -- not for racist messages on receipts, but for dozens of unsolicited text messages containing pizza promotions. A few enterprising franchise owners employed a third-party messaging service to spam former customers with a stream of offers, often in the middle of the night, and all without their consent, making the texts a violation of federal law.

3. Papa John's Racist Voicemail Spurs CEO Apology

It turns out Schnatter wasn't the only one casually dropping the N-word around the office. The former CEO had to issue an apology after a delivery driver accidentally butt-dialed a customer a left a 4-minute, racial slur- and expletive-laden voicemail complaining about a $5 tip. "Friends, I am extremely concerned to learn about the reprehensible language used by two former employees in one of our restaurants," Schnatter said at the time. "Their thinking and actions defy both my personal and the company's values, and everything for which this company stands."

4. Pizza Chief Steps Down Over NFL Speech; Should Companies Just Stuff It?

Only a few years later, however, racial issues had Schnatter and his company back in the headlines. The former CEO blamed the NFL for his company's flagging sales, claiming the league's "leadership has hurt Papa John's shareholders," on a conference call with analysts, referring to national anthem protests by football players, which he felt "should have been nipped in the bud a year and a half ago." "Good or bad, leadership starts at the top," Schnatter said, "and this is an example of poor leadership."

And Schnatter should know.

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