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'Papa John' Schnatter.... in context

'Papa John' Schnatter.... in context

by Joe Arnold


Posted on January 13, 2013 at 1:10 AM

Updated Wednesday, Sep 18 at 1:53 PM

(WHAS11 Political Blog) -- With the Louisville Courier-Journal publishing an interview with Papa John's founder and CEO John Schnatter in which he says his comments on 'Obamacare' were inaccurately portrayed in the media, I decided to rewatch my "Papa John's" story from November 12, 2012.

In the story, WHAS11 clearly reported that Schnatter did not tell Florida college students that he wants to cut worker hours - but that he expects franchise owners will cut hours because they can't afford the costs of health insurance plans.

Though the video of both of my Nov. 12 stories was posted that same day, I just realized that my written version of the story was never paired with the video.  Instead, up until now, the copy of an ABC News story on Papa John's accompanied the WHAS11 story. 

I have amended the web posting to include both, and have posted my original copy, below.




Editors Note: Though the video of this story was posted on WHAS11.com the day it aired, November 12, 2012,  the original copy (written version) that accompanied this story was provided by ABC News.  The WHAS11 copy can now be found below:

LOUISVILLE, Ky (WHAS11) -- Papa Johns founder John Schnatter is back in the headlines after more comments about President Barack Obama's healthcare reform law.

Schnatter says owners of Papa Johns stores may choose to cut the hours of some part time workers to avoid having to provide them health insurance. Yet, Schnatter also disclosed that it is "good news" that "100 percent of the population is going to have health insurance. We're all going to pay for it." 

Schnatter spoke the day after the election to students at Edison State College in Florida. Naples Daily News reporter Jennifer Lipscomb recorded his comments - and provided the recording exclusively to WHAS11 News.

On the tape, Schnatter does not say that he wants to cut worker hours - but that he expects franchise owners will cut hours because they can't afford the costs of health insurance plans.

"That's probably what's going to happen.  It's common sense. That's what I call lose-lose,"  Schnatter told the students.

And Papa Johns is certainly not alone.

By 2014, employers with the equivalent of at least 50 full-time workers will be required to provide health care for to employees who work 30 or more hours a week.  Or, if they choose not to offer health care to those employees, the companies can pay a $2,000 penalty per employee after the first 30 workers.

"Are we going to see an explosion in more part time workers?  Probably," said Dr. Jose Fernandez, a University of Louisville Economics Professor.  "And the reason is some of these full timers are going to be pushed down.  Are we going to see firms restrict the size of their plants?  Yes."

When Schnatter was asked by Lipscomb about the health care law's effect on Papa John's he acknowledged a controversy in August when he told stock analysts that Papa Johns would pass along the cost of "Obamacare" to customers - 11 to 14 cents per pizza.

"Obamacare, I got in a bunch of trouble for this," Schnatter said.

"As a business, that's what you do, is you pass on costs," Schnatter said.  "I don't get taxes.  All I do is collect them.  the government tells me what to charge in taxes.  I just collect them and pass them on to the government."

"Obamacare has been deemed a tax," Schnatter continued.  "Unfortunately, I don't think people know what they're going to pay for this.  I'm not pro or against because we've always wanted 100 percent of our employees on health care. Our business is set up with minimum wage, and most folks come in at a young age where we never had people on insurance.  We only had a third of our folks on insurance."

"I like the fact that 100 percent of all Americans are now going to have health insurance. I think that's good," Schnatter told the students.  "It's just the way it's been kind of ramrodded down our throats. I question if that was the right thing or not."

WHAS11's attempts to reach Schnatter and Papa John's were unsuccessful.

Because most Papa Johns stores are independently owned franchises, it's unclear whether the 50 employee health care mandate applies to overall companies or individual locations.

"There's going to be a legal battle there," Fernandez said.  "I think its going to be arguable.  If it's the same person signing all the checks, you might consider that the same firm.  If you can somehow spin that off and say they are operating independently of your power, than those are separate firms."

Fernandez agreed with Schnatter, that some businesses will have an incentive to cut some workers' hours.

"Some of these part time workers will face a reduction in hours or at the very minimum a reallocation of their hours worked," Fernandez said.  "Where you couldn't do something to the effect of, 'I'm going to work three weeks really hard this month and then have that last week off,' Instead you're going to spread those hours over the full four weeks."