Papa John's Gets Sued By Its Founder

John Schnatter filed a lawsuit on Thursday (July 27) against the company he founded, Papa John’s, accusing it of failing to produce documents related to his ouster.

Earlier this month, Schnatter officially resigned from his position as chairman of the board after admitting to the use of a racial slur during a May conference call. Media reports also indicated that Schnatter was accused of graphically describing violence against minorities.

“News reports attributing the use of inappropriate and hurtful language to me during a media-training session regarding race are true,” Schnatter said in a statement. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

According to Reuters, Schnatter’s lawyers want to inspect company documents “because of the unexplained and heavy-handed way in which the company has treated him since the publication of a story that falsely accused him of using a racial slur.”

In addition, Schnatter, the largest shareholder of Papa John’s, said that Steve Ritchie should not be leading the company.

“Steve Ritchie would be a great executive for another company. I just don’t think he’s the right fit for Papa John’s at this time,” Schnatter said, adding that he has informed the board of his concerns.

Ritchie, who rose from a $6-per-hour employee to Papa John’s president, took over as chief executive in January after Schnatter criticized the National Football League’s leadership over players’ national anthem protests.

Schnatter said that the company’s performance has suffered under Ritchie, with the company’s shares dropping about 40 percent over the last 12 months.

“In my view, things are getting worse, not better. That is why the board needs to take action, and shareholders may need to take action in regards to the board,” said Schnatter.

When asked to comment on behalf of Ritchie and Papa John’s, a company spokesperson said that it would not let Schnatter’s “numerous misstatements” distract the company and its customers.



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