President-elect Donald Trump is expected to name Andrew Puzder as Labor Secretary today, according to CNBC.
A former attorney, Puzder is the CEO of CKE Restaurants, which owns several nationwide fast food chains.
Puzder has been an outspoken critic of what he says is overregulation’s crushing impact on the restaurant industry and the overall economy.
On his blog, andy.puzder.com, he also claims the country’s immigration and trade policies are “killing” the working and middle classes.
A frequent guest in the business media, and an advisor of President-elect Trump during his campaign, Puzder told CNBC the day after the election that the Affordable Care Act “has to go and it has to go quickly.”
He has also been an outspoken critic of the DOL overtime rule that doubles the overtime wage threshold, which would make about 4.2 million previously exempted workers eligible for overtime pay. A federal court in Texas has temporarily blocked the rule.
Puzder argues that the ACA has not only increased employers’ costs, but that increasing premiums in the individual market has drained consumers’ discretionary income.
On health care, he has argued that new tax incentives for the middle class will incentivize insurers to compete for workers that don’t have access to health care through their employer. He acknowledged the challenge of addressing insureds with preexisting health conditions to CNBC.
“Competition reduces prices and improves quality,” said Puzder. “Government has a legitimate role in regulations, it’s just we have so many regulations—it’s killing business,” Puzder said.
Puzder is not on the record regarding Labor’s fiduciary rule, which will be implemented April 10, 2017.
Potential conflict of interest
Puzder’s nomination will likely raise questions of conflicts of interest from supporters of the Labor’s overtime rule. Any effort to roll the rule back under the arump Administration would benefit CKE Restaurants.
As Secretary, Puzder would oversee Labor’s Wage and Hour Division, which enforces minimum wage and overtime regulations under the Fair Labor Standards Act.
In 2015, more than 40% of the Wage and Hour Division’s enforcement actions were against restaurants, substantially more than any other industry, according to data on the WHD website.
Under the Obama administration, the Wage and Hour Division has initiated about 4,000 investigations at the 20 largest fast-food chains in the country, according to a recent analysis by Bloomberg on bna.com. Those investigations have recovered $14 million in back wages.
At Hardees and Carl’s Jr. restaurants, franchises both owned by CKE Restaurants, about 60% of the wage and hour division’s investigations raised at least one FLSA infraction.
The Bloomberg BNA analysis shows 108 investigations of CKE Restaurants since 2004 recovered $153,921 in back wages. More than 90% of CKE’s 2,500 stores are franchised to independent owners. Six audits were conducted at company-owned restaurants, which yielded no infractions.
CKE Restaurants also stands to be impacted by a “joint employer” ruling issued by the National Labor Relations Board against McDonald’s Corp., which is currently being litigated in an administrative court.
If the NLRB succeeds, McDonalds and potentially other franchisors like CKE Restaurants would be exposed to liability for the labor practices of its franchisees.
The new standard would also make it easier for unions to organize multiple franchises of fast food chains, according to analysis by Littler’s Workplace Policy Institute.
The NLRB is an independent government agency that operates outside of the Labor Department. Puzder has been a vocal critic of the joint employer standard.
Writing in a 2014 Wall Street Journal op-ed, he said, “If the NLRB’s new interpretation of the rules becomes the law of the land, it will be tantamount to rewriting an existing contractual relationship by government fiat in ways the parties never contemplated and to the mutual detriment.”
According to a filing with the Securities and Exchange Commission, Puzder earned $7.2 million in total compensation in 2010, $10.1 million in 2011, and $4.4 million in 2012. About $10.2 million over those years was in stock awards.
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