Papa John’s founder John Schnatter resigned last week as board chairman after it was publicly disclosed that he had used a racial slur during a conference call about how the company could avoid race-related controversies.

Schnatter’s resignation was welcome and necessary; the racist language he used and gross insensitivity he displayed have no place in our society. But this wasn’t the first outrage at the company under his watch: A New York state investigation I worked on in 2016 found evidence of widespread wage theft at Papa John’s locations there. And if our findings had generated the entirely deserved moral opprobrium that his use of the slur did, maybe he would already have left the company.

Papa John’s founder and CEO John Schnatter will leave as CEO in January, weeks after he publicly criticized NFL leadership.

At the New York state Attorney General’s Office, we did a broad investigation of labor law violations at Papa John’s restaurants. Here’s what we found: pervasive minimum-wage and overtime infractions. Stores that shaved the hours on workers’ time sheets to save a buck on wages. Employers that didn’t reimburse drivers properly for the vehicle-related costs of delivery. In one case, we got a court judgment against a Papa John’s franchisee for $2 million. In another, a franchisee was investigated by the federal Labor Department but continued breaking the law, creating fake names for workers and fake tax and payroll records. He ultimately pleaded guilty after a criminal prosecution and was sentenced to 60 days in jail.

In all, the New York Attorney General’s Office has so far found violations by eight separate Papa John’s franchisees, who together operated over 30 restaurants in the state. The entire company reported only 100 outlets in the entire state in 2016, so this is about a third of them, and we didn’t investigate all of the stores.

How did Papa John’s respond to these damning findings? The company itself denied responsibility; a typical statement read, “Papa John’s believes that all of its team members should be fairly compensated in accordance with the law.” The corporation effectively blamed its franchisees: “Papa John’s does not control or dictate independent franchisees’ employment activities.”

It’s true that the franchise model gives franchisees – the immediate employers – direct authority for determining workers’ wages and hours. Yet companies have a lot of power to affect and correct problems in franchisees’ operations. And this pattern of franchisee violations was extensive, suggesting a systemic problem that cried out for serious attention by the company at large.

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So what happened when our cases came to light? Schnatter didn’t step down. There was no indication of board concern, and no outcry, except among fast-food workers and their allies.

That’s often what greets disclosure of mistreatment of workers. Look at long-standing knowledge about how Uber treats its drivers: There’s been little public censure of CEO Travis Kalanick over that. Like Schnatter, Kalanick did eventually resign over other issues – in his case, allegations that the company didn’t take sexual harassment seriously.

But Uber’s very business model is based on the fairy tale that each driver is running his or her own unusually small, yet oddly identical business, and therefore shouldn’t get the already minimal protections afforded to employees under the law. A recent study commissioned by the New York City Taxi and Limousine Commission found that over 85 percent of drivers for Uber and its peers make less than the equivalent of $15 per hour; 40 percent have incomes so low they qualify for Medicaid; 16 percent have no health insurance; and 18 percent qualify for federal supplemental nutrition assistance (nearly twice the rate for New York City workers overall).

But with Uber, as with Papa John’s, there has never been much stigma related to the company’s evasion of responsibility for even the most minimal well-being of the people who do the work. The shock and disgust emerged only when sexual harassment reports came to light.

I am in no way diminishing the importance of fighting racism, sexism or other kinds of discrimination; they fully merit the intense, yet still grossly insufficient, moral condemnation they receive by all decent people. But mistreating employees should also cause us to recoil. It should also be cause for disgrace. You should not be allowed in polite society if you mistreat your workers – and this includes not just extreme cases, but also the more common skimming and scraping and cheating that make it so hard for people to get by.


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