Newly unsealed court documents outline allegations made by John Schnatter, the founder of Papa John’s, that leadership at creative agency Laundry Service including former CEO Jason Stein conspired to do further harm to his reputation following the May 2018 call in which Schnatter allegedly said the n-word.
Schnatter left his role as Papa John’s chairman and was wiped from marketing materials for the chain soon after a Forbes report in July 2018 alleged he used the racial slur during a media training call with Laundry Service in May 2018.
In 2019, Schnatter sued Laundry Service and its parent company, Wasserman Media Group. Then, in December 2020, he claimed he had a recording of Laundry Service executives "plotting to damage" his reputation.
An amended complaint filed by Schnatter, Papa John’s former chairman and CEO, was recently ordered to be unsealed by the U.S. District Court for the Western District of Kentucky. The complaint alleges that Jason Stein, then-CEO of Laundry Service, and others were speaking after a call with Schnatter.
Those internal discussions were recorded, according to Schnatter’s complaint.
“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 fucking sent out to pasture on this shit’ (in Stein’s words),” the complaint reads.
It goes on to say that Laundry Service’s employees came up with a plan to arrange for 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,’” the complaint reads.
Laundry Service and Wasserman declined to comment. A representative for Mr. Stein, who is no longer with the agency, did not immediately respond to a request for comment.
The conversation was taped by a witness in the litigation, according to Schnatter, who released the unsealed document and a statement on Wednesday.
“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,” Schnatter said in the statement.
According to Schnatter’s statement, a former Laundry Service employee present for the discussions 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.” And, according to Schnatter’s statement, the employee reported the issue to Laundry Service’s HR department, providing the recording, and was told to delete it.
Schnatter has been trying to restore his reputation after it was damaged due to the Forbes report and subsequent media attention. He has said in the past, and noted in the complaint, that he was speaking out against racism and that he was criticizing someone else’s use of the racial slur when he said it during the May 2018 training call.
In December, Schnatter publicized a report from former FBI Director Louis Freeh which found no credible evidence of racially insensitive words or actions by Schnatter.
“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 said in his statement Wednesday.
