John Schnatter is suing the company he made famous after being ousted as its leader over using the n-word as an example of a slur used by KFC founder Colonel Harlan Sanders, during a company conference call.
A lawsuit was filed in a Delaware Court on July 26 in which Schnatter demands access to company records due to “the unexplained and heavy-handed way in which the company has treated him,” according to CNN Money.
The pizza chain founder’s most recent controversy arose after taking flack for using the n-word during a conference call training session on workplace behavior. During the call, Schnatter observed that Colonel Harlan Sanders of Kentucky Fried Chicken fame — who died in 1980 — used the n-word and no one ever came down on him.
The corporation moved quickly to eliminate Schnatter from positions of influence and from having any connection at all with the company. After his resignation the board evicted him from his corporate offices, began a systematic elimination of his image from advertising, and then adopted a “poison pill” strategy to prevent him from re-taking control of the company.
“The board asked me to step down as chairman without apparently doing any investigation. I agreed, though today I believe it was a mistake to do so,” Schnatter wrote in a letter he sent to the company board of directors. “I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted.”
Schnatter added that when he used the n-word on a conference call during the ill-fated training session, it was used in a technical sense, not used as a racial epithet.
In his new lawsuit, Schnatter accuses the board and executives of “breaching their fiduciary duties” with their swift removal of him from the company.
“Either the purportedly independent directors acted without adequate information and breached their duty of care,” or they “planned this coup in advance,” the paperwork says. “Mr. Schnatter is entitled to determine whether his fellow directors have been grossly negligent or are acting in bad faith, or both.”
Schnatter and his legal team are seeking company records “among and between board members and lawyers” about his treatment.
For its part, the company said it has already promised to provide “all of the materials he is entitled to as a director,” adding, “We will not let his numerous misstatements in the complaint and elsewhere distract us from the important work we are doing to move the business forward.”
Papa John’s cut ties with the National Football League after Schnatter insisted that the national anthem protests was “polarizing” his customers and driving down his profits. Schnatter claimed that his status as the “official pizza of the NFL” was hurting his company.
Schnatter has also suffered setbacks in other venues. His name was removed from the University of Louisville’s football stadium — where he was on the board of directors and is a major donor. In another case, his hometown of Jefferson, Indiana, also removed his name from a basketball gym and his photo was removed from the city’s Wall of Fame after the n-word controversy exploded.
Follow Warner Todd Huston on Twitter @warnerthuston.
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