Papa John's founder suing creative firm claiming it leaked comments leading to his ouster

Papa John's founder John Schnatter is suing the creative advertising firm, Laundry Service, and its parent company, claiming breach of contract and other wrongs that led to his ouster from the international pizza chain.

Schnatter's suit, filed Thursday in Jefferson Circuit Court in Louisville, accuses Laundry Service of Brooklyn, New York, and parent Wasserman Media of leaking comments from a recorded meeting in May 2018 when Schnatter reportedly used a racial slur.

The incident led Papa John's board of directors to force Schnatter out as executive chairman, cancel his lucrative founder's contract and lock him out of the company's eastern Louisville corporate headquarters.

Schnatter has repeatedly defended himself in interviews, insisting his remarks were taken out of context and became an excuse for the Papa John's board of directors and senior managers to boot him. 

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The company declined to comment on the suit Thursday. Laundry Service did not respond to a message sent through the company's website.

Schnatter's team said in a press release about the lawsuit that he expressed disdain for racism and criticized a well-known figure – Harlan Sanders of Kentucky Fried Chicken fame – who reportedly used racial slurs.

The release says the recording supports Schnatter's repeated assertions that he "never used that word."

It also asserts Schnatter was misled about the purpose of that conversation with Laundry Service, which was as an advertising agency for Papa John’s at the time.

“He was led to believe the call would concern new marketing initiatives for Papa John’s, but Laundry Service instead used the call to ask him questions regarding his views on race,” the complaint says. “Throughout this call – which Laundry Service recorded without his knowledge – Mr. Schnatter spoke out against the insidious effects of racism in society and relayed some of his own experiences from growing up in Indiana.”

Schnatter claims Laundry Service leaked excerpts of the call to the media without providing the proper context for his comments in “apparent retaliation” over Papa John’s refusing to pay the company $6 million.

Shortly after that phone call, Casey Wasserman, chief executive of Wasserman Media, told Papa John's then-CEO Steve Ritchie that he would "bury the founder" if Laundry Service was not paid $6 million, the suit alleges.

The claim seeks unspecified damages for three counts, including breach of contract, tortious interference with prospective economic advantage and intentional infliction of emotional distress.

Schnatter has pledged to contribute all net proceeds from the lawsuit to charity, according to a release about the suit.

"John Schnatter looks forward to a true, open accounting of what happened," said Terence Healy, counsel for Schnatter. "Fortunately for John, this call was recorded. We encourage people to read the complaint and look at what John actually said."

Contributing:  Louisville Courier Journal reporter Morgan Watkins