Fast-food executive and attorney Andrew Puzder, expected to be President-elect Donald Trump’s nominee to lead the U.S. Labor Department, is a sharp critic of Obama administration regulations whose appointment could roll back efforts to expand corporate liability and raise worker wages.
Puzder, chief executive of CKE Restaurants Inc., a privately held company that owns Carl’s Jr. and Hardee’s, has spoken out against Obama administration’s updated overtime rules and efforts to raise the minimum wage. He also has criticized the new joint-employer standard, which broadened the scope of labor liability for closely associated companies.
Puzder, who would replace Secretary Thomas Perez, began his career as general counsel at Fidelity National Financial, according to his LinkedIn bio, before becoming the personal attorney of Carl’s Jr. founder Carl Karcher. He took over as general counsel of CKE in 1997 and ascended to the CEO spot three years later.
Trump has not formally announced his pick for Labor. A source familiar with the matter confirmed that Puzder was the expected nominee. The Associated Press said Trump was expected to make the announcement Thursday.
Attorneys who represent employer interests praised Puzder as a “refreshing” choice as the first business leader in recent memory chosen to lead the Labor Department. But labor advocates and some Democrats strongly condemned Trump’s expected pick, indicating Puzder may face a confirmation challenge in the Senate.
Sen. Charles Schumer, D-N.Y., said in a statement: “Turning the Labor Department over to someone who opposes an increase in the minimum wage, opposes the overtime rule that would raise middle class wages, and whose businesses have repeatedly violated labor laws might be the surest sign yet that the next cabinet will be looking out for the billionaires and special interests, instead of America’s working class.”
Debra Ness, president of the National Partnership for Women and Families, called Trump’s pick “appalling.” Puzder, she said, is “a stunning and unwelcome departure from the dedicated and powerful champions who have held that post in recent years, and who have helped advance policies like fair pay, paid sick days and paid family and medical leave that are critical to the well-being of workers and families, businesses and our economy.”
Puzder: ‘Industry Is Under Attack’
As CEO, Puzder, who keeps a blog on labor issues and co-authored a 2011 book titled Job Creation: How It Really Works and Why Government Doesn’t Understand It, has spoken widely against pro-employee labor regulation and its effects on the fast-food industry.
In a November 2014 appearance on Fox News’ Varney & Co., he said that regulatory costs are “way up” under Obama and said that “industry is under attack” by the administration.
In a May 2016 Forbes editorial, he criticized the DOL for a rule that it proposed expanding overtime, saying that it would lead to increased regulatory expenses and hurt employee pay and benefits when employers try to offset these new costs.
Currently, under the Fair Labor Standards Act, employers are required by law to pay nonexempt employees time-and-a-half for working more than 40 hours per week only if the employees earn less than $23,660 per year. But with the DOL rule — which was temporarily enjoined by a Texas federal court last month— an estimated 4 million additional employees would be eligible for mandatory overtime, as the exempt salary threshold would be raised to $47,476, as reported in sibling publication Corporate Counsel.
“One can only wonder when the advocates of progressive economics will realize that, despite their best efforts, you cannot regulate your way to economic prosperity,” Puzder wrote in the Forbes piece.
The appeal will be expedited, at the request of the Labor Department, in the U.S. Court of Appeals for the Fifth Circuit.
Puzder has also been a harsh critic of the Obama administration’s support of the joint employer standard. Through regulation at the National Labor Relations Board and the Labor Department, the administration has worked to expand the definition of “joint employer.” Two companies working together — for instance, a company and its staffing agency or contractor, or a franchisor and franchisee — can both be held accountable for the alleged labor violations of one employer.
The would-be Labor nominee, whose company has franchise agreements for restaurants around the U.S. and in foreign countries, held forth on the joint employer standard in a July 2014 Wall Street Journal editorial, saying the system would “destroy the business model” of the fast-food industry.
— Related on ThinkAdvisor.