Papa John's founder John Schnatter resigns
John Schnatter quits as chairman after using racial slur during a conference call on how to handle controversial situations.
The John Schnatter stink will be harder to clean up at Papa John’s than first expected.
The chief executive and a second high-ranking executive at the pizza chain — pals of Schnatter whom he installed in key positions — failed to curb a “bro” culture at the Louisville, Ky., business that featured open discussion of “gangbangs” and other hostile terms, a Forbes report on Thursday claims.
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Women in the office were often mocked, asked during business conversations if they were menstruating and were subjected to comments from male executives about whether they wanted “to jump on the train,” according to the report from Forbes, which interviewed 37 current and former employees.
CEO Steve Ritchie was present for many of the toxic comments and just laughed, three employees told Forbes.
The 5,212-store chain has been feeling the heat since last week when it was revealed that Schnatter, who founded the chain in 1984, uttered the N-word during a May media-training session.
Schnatter, who owns 29 percent of the company, apologized for using the racial slur — and claimed that he was “pushed” to use the offensive language.
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Over Schnatter’s tenure, Papa John’s has agreed to two confidential settlements after he was accused of inappropriate conduct, Forbes reported.
The company decided to erase the executive’s likeness from all its marketing materials— and Schnatter stepped down as chairman.
The company decided to erase the executive’s likeness from all its marketing materials in the wake of last week's scandal. (AP/Charles Krupa)
Its board has formed an independent committee that has hired an outside firm to probe the matter.
But the problem may be larger than just the 56-year-old executive.
Without addressing the specific allegations, Papa John’s issued a statement repeating its promise from earlier in the week to retain “an outside firm to oversee an audit and investigation of the culture at the company and to make recommendations for whatever changes may be necessary.”
Schnatter’s lawyer, Patricia Glaser, said the Forbes story contains “inaccuracies and misrepresentations.”
Glaser did not elaborate.
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Schnatter is squaring off with his fellow directors — demanding key emails and correspondences so he can better defend himself against possible litigation and the company’s efforts to get him off the board.
Shares of the pizza chain closed down 4.9 percent on Thursday, to $51.
This article originally appeared in The New York Post.
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