https://www.cnn.com/2019/11/26/business/papa-johns-schnatter-interview-trnd/index.html
In the latest chapter of John Schnatter’s fall from grace, the former CEO of Papa John’s has, in a recent interview, criticized the pizza chain “for everything from the quality of the pizza to its upper management.” These comments of course come after a period in which he reportedly consumed 40 Papa John’s pizzas in 30 days.
I think this raises some important questions for in-house counsel; we’ve discussed the complexity of dealing with problematic CEO’s such as Elon Musk and Lulu Lemon’s Laurent Potdevin, but what steps are to be taken when a problematic former CEO – who has been mostly excised from the company – continues to speak out and damage your brand?
– Jonathan Wiese
One of the points I noted in my presentation was that in-house lawyers should not only ensure the company complies with the law but should also consider the public relations and public policy concerns that underlie the law. That the article mentions Papa John’s did not immediately respond to a request from CNN suggests to me that in house counsel and communications haven’t contemplated a communications strategy to address the PR impact of Schnatter’s ouster. What complicates matters more is that, although Schnatter has sold off most of his shares, he still holds a 15% stake in the company and is the largest shareholder. As such, Schnatter is an interested party. And as I noted in my presentation, part of the role of in house counsel is to act as an advocate for the shareholders, for the company itself, and for the investors. So perhaps this means advocating for shareholders like Schnatter by mitigating the damage that he himself is doing to the company’s brand.