Papa John’s CEO Pledges To Fix Culture, But Sidesteps Most Allegations About Himself

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Papa John’s CEO Steve Ritchie.Forbes

Papa John’s CEO Steve Ritchie sent a note to employees on July 19 pledging to address failings in the company’s culture, following a report published by Forbes that morning. In his letter, Ritchie said he was “personally offended by the actions” of company founder John Schnatter “as depicted in the story.” But Ritchie did not specifically address allegations that he enabled some of those cultural failings and that he has been a loyal ally to Schnatter for years.

In the note, which was obtained by Forbes and verified by a Papa John’s representative, Ritchie said, “To be clear, I do not permit, condone or tolerate any form of harassment or sexism in the workplace or at work-related functions. When issues have come to our attention, we have engaged and empowered our staff to complete a full investigation, so that action could be taken.” Ritchie went on to say that, as mentioned earlier in the week to staffers, the firm had taken some steps to confront its cultural problems, including hiring outside experts to conduct an audit.

Letter from Steve Ritchie to staffers sent Thursday, July 19, 2018.Forbes

However, those comments did not address a number of allegations leveled against Ritchie in the Forbes story, which was based on interviews with 37 current and former Papa John’s employees. One former executive said that Ritchie “promoted people based on his personal relationship with them versus their results.” Three former executives said that Ritchie knew of misconduct in the workplace. On company off-sites, Papa John’s leaders allegedly made inappropriate jokes about “gangbangs” and whether women wanted “to jump on the train.” Even back at corporate headquarters in Louisville, “these things would happen in meetings and conference rooms and whatever,” said an employee with direct knowledge of the behavior. “Steve would just laugh. He would just laugh.”

One example, according to three sources, was an operations executive named Dustin Couts. Among his alleged transgressions: he discussed porn with a junior female employee, showed inappropriate images to coworkers on his cell phone and asked a colleague who disagreed with him if she was menstruating. By all appearances, Couts was not punished for that conduct. In May, he was named regional vice president of Papa John’s Asia/Pacific. (Couts did not respond to a voicemail or text messages seeking comment.)

After the Forbes story published on July 19, a Papa John’s spokesman said, in part, “We take this matter seriously. If anything is found to be wrong, we are determined to take appropriate action.” Ritchie did not respond to a request for comment on that story, and a Papa John’s representative, speaking on his behalf, declined to comment for this article.

Ritchie is a longtime Papa John’s staffer who began as a customer service representative and slowly rose in the ranks. He worked directly for Schnatter from 2008 to 2011 on one of Schnatter’s side investments, a sandwich business called Calistoga Bakery Café. He was named chief operating officer of Papa John’s in 2014 and president the following year. Ritchie has run day-today operations ever since. On January 1, 2018, he took over the CEO role from Schnatter, who stepped down after making controversial remarks about national anthem protests in the NFL.

Six former Papa John’s executives told Forbes that Ritchie was not qualified for the job of president, yet alone chief executive. They say he was selected largely because Schnatter viewed him as a loyalist. When Ritchie was named to the Forty Under 40 list of a Louisville publication in 2013, he named “John Schnatter” as his role model.

“John got Steve to where he is. Steve is not going to do anything to turn on John,” says a former senior executive.

The future of Papa John’s is unclear. Franchisees want the business to distance itself from Schnatter, and Ritchie said in his letter on July 19 that Schnatter’s departure as chairman “gives us the opportunity to make sure that our culture is aligned with the right values.”

Schnatter, meanwhile, seems intent on staying involved. He retains a board seat and is the company’s largest shareholder. As recently as Tuesday, July 17, he was spotted inside Papa John’s headquarters.



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