Chicago Business Litigation Lawyer Blog
Walking the tightrope of business ethics and practice becomes more and more under scrutiny in a climate where minorities are divided. Business owners want to maximize potential, please customers and, let’s face it, the money does matter! Have a business and then be implicated with being racist will come into play in affect image negatively. That’s where allegations of a racist slur have hit the founder of Papa Johns. He came under fire for criticizing the National Football League’s leadership when it came to the anthem “take-a-knee” protests by players. Comments made have come to haunt him in such a way to put him in trouble and, eventually, have led to suit. In the suit filed, company documents are to be inspected due to the company’s treatment of him since the publication of a rumor. He says they are false.
The incident surrounds a conference call made and use of the N-word when it came to Colonel Sanders and KFC. Papa Johns was a sponsor of the National Football League and the context of the conversation came about when national anthem protests were being discussed. In asking him to resign from the company, he feels ousted without proper investigation into the matter. This has, in turn, lead to a “breach of fiduciary duties” in cutting him off from the company. All marketing materials and commercials, including logos have been edited to remove his name or image as well. It is likely that all materials that he is entitled to will be brought into the lawsuit. He feels he will be exonerated.
It is bizarre that a company would consider letting someone go without prior investigation. The belief must have been strong or an excuse to enter into such hastiness. The founder refers to the attempt as a coup. Lawsuits like this can become long and drawn out. The outcome of this should be interesting. Papa Johns pizza obviously felt a need to protect their consumer base and the NFL had dropped them as a primary sponsor. Even an argument like not being in line with an image or the “right fit” could even be enough to no longer serve in that capacity.
It is speculated that shareholders wanted to control the amount of say he had in the company. This is one way of maintaining greater leverage if that is the case. As it stood, he owned thirty percent of the share. Considering his ownership levels in the company, he planned to stay on board and the company has not given any sign of whether it would hold a meeting to change the status quo. Over time, members of the board were getting unreasonable. Board intervention may have been the better option and possibly saved legal costs. Shareholder action may have been warranted also. The company, however, sees the lawsuit as futile and a waste of time. The lawsuit goes further to state that shareholders violated the duty to care and failed to investigate. Actions were made without investigation is the basis for that. Let’s just see where all of this goes.
https://www.foxbusiness.com/retail/papa-johns-founder-john-schnatter-sues-pizza-chain
https://money.cnn.com/2018/07/26/news/companies/papa-johns-lawsuit-john-schnatter/index.htmlSuper Lawyers named Evanston and Rogers Park Illinois closely held corporation law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois breach of contract, partnership, shareholder rights, and business trial lawyers have over thirty years of experience in litigating complex business disputes, shareholder freeze-outs, and squeeze-outs, breach of fiduciary duty and partnership dispute claims and many different types of business and commercial litigation disputes. Our Kane and DuPage Counties business dispute lawyers, civil litigation lawyers, and copyright attorneys handle emergency business lawsuits involving injunctions disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.