Federal Court Unseals Complaint Detailing Secret Plot To Damage Papa John's Founder And Company Brand

LOUISVILLE, Ky., March 3, 2021 /PRNewswire/ -- The U.S. District Court for the Western District of Kentucky has ordered that an Amended Complaint filed by Papa John's founder and former Chairman and CEO John Schnatter must be unsealed, revealing shocking details from the case for the first time. The unredacted excerpts demonstrate how Laundry Service, a firm hired by Papa John's to enhance its brand and that of the company founder, instead conspired to directly and willfully harm their image and brand.

According to the Amended Complaint, the details come from a "hot mic" conversation between the Laundry Service CEO, Jason Stein, and other firm personnel after concluding a conference call with Schnatter, in which the Papa John's founder repeatedly expressed his disdain for racism. Clearly planning to reverse the meaning of Schnatter's comments and expose a false version of them to the media, Stein and his colleagues discuss ways they can destroy the founder's reputation and thus his namesake company's brand, as reflected in the complaint.

In the conversation that was taped by a witness in the litigation, Stein said that he hoped "he gets f******* sent out to pasture on this s***." The plot was to use Schnatter's statement "against him" and to schedule a "live interview with a hostile media personality and prompt Mr. Schnatter to make damaging statements which need 'to be viral,'" according to the complaint.

"The chilling details from this taped conversation make clear the intent of Laundry Service to destroy my reputation, as well as the Papa John's brand, harming our employees and franchisees in the process. A recent investigative report by former FBI Director Louis Freeh showed there was nothing racist in my words or actions on the conference call with our ad firm and also proves there has never been in my history. With this and the evidence coming forth in our litigation, it's time for Laundry Service to be held accountable, and for Papa John's to correct the record and apologize to me for validating the media frenzy that led to my forced departure as the company Chairman," Schnatter concluded.

The unsealed evidence in the Amended Complaint will help prove through the litigation that Laundry Service violated its contractual obligations and acted against its responsibilities to help enhance Mr. Schnatter's reputation and the company brand.

Reference: Civil Action No. 3:20-cv-000003-CHBCHL 

Excerpts from amended complaint, unredacted

6. At the end of the call, Mr. Schnatter criticized a well-known public figure for using a racial slur against African Americans and stated that he himself had "never used that word." He was thus both criticizing the use of the epithet and contrasting that it was something he himself had never done. Nonetheless, immediately after the call — in the comments inadvertently captured by Laundry Service's own recording — its employees immediately began to discuss how they could use Mr. Schnatter's comments against him. PAGE 3-4

34. Unbeknownst to Mr. Schnatter, Laundry Service recorded the call. However, Laundry Service continued recording after Mr. Schnatter hung up, and captured internal discussions between senior Laundry Service employees (including Stein, its CEO at the time) directly after the call ended. Those discussions are shocking. Laundry Service immediately began to discuss how Mr. Schnatter's statements on the call could be used against him to damage his image so "he gets f****** sent out to pasture on this s***" (in Stein's words). The plan, according to the recorded conversation, was to arrange for Mr. Schnatter to have an hourlong live interview with a hostile media personality and prompt Mr. Schnatter to make damaging statements which need "to be viral." PAGE 9 

35. There was no mistaking Laundry's Service's ill-intent. As a former employee present during these discussions has testified: "this did not seem part of the efforts to maintain – to help John's reputation to do the job that we were paid for to help … [this seemed like] the opposite of helping John." When that employee reported the issue to Laundry Service's human resources department and provided the incriminating recording, he was told to delete the recording. PAGE 9 

55. One of the key services to be provided by Defendants under the Services Agreement was to assist Mr. Schnatter in rehabilitating his image following the unfair characterization of his comments about the NFL anthem protests. Rather than provide such assistance, Defendants decided to do the exact opposite: put Mr. Schnatter in front of a hostile interviewer in front of a live audience and prompt him to make comments that would inevitably be misconstrued and used against him. All so that, as Laundry Service's then-CEO hoped, Mr. Schnatter "gets f****** sent out to pasture on this s***." PAGE 13

SOURCE John Schnatter