Business litigation pits Papa John’s against directors

Companies that operate in Georgia often encounter potential or actual business disputes with other companies or internally within the business itself. When a company’s founder or CEO is known to be both eccentric and highly controversial in his public statements, business litigation between that individual and his or her own company may tend to break out at some point. Today’s culture of mass communications dictates that sensitivity and discretion must be used lest there be an instant public reaction to a CEO’s ill-chosen, inappropriate comments.  

Witness the case of Uber’s founder and CEO who was ousted for controversial actions within the company and for public statements or events characterized as bizarre and/or bullying in nature. The chairman and founder of Papa John’s pizza chain has a similar reputation for making questionable public statements and for drawing the wrath of certain public interest organizations. John Schnatter discovered that such public commentary can go too far when he made comments in a telephone conference that were later highlighted in a Forbes article.

The outcry over Schnatter’s alleged use of racial slurs was too much of a storm to weather and he resigned accordingly. Schnatter, however, had millions invested in the company and he decided to remain as a board member. Just recently, he resurrected the controversy by filing suit against the board of directors, claiming that the members were treating him in a heavy-handed manner and drove him out without an investigation. He now denies having used a racial epithet in any kind of a discriminatory or improper manner.

This is another example of inappropriate behavior that backfired and caused the ouster of the very person who founded and molded the company into a successful enterprise. Obviously, the crisis originally was too inflammatory for him to survive in the public eye. He remained on the board, however, which was a shrewd attempt to get positioned for a second battle and a back-door assault against his inside enemies. Business litigation among corporate entities and former founders or officers is common in most state and federal courts, including here in Georgia.