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 companies closely associated.

Puzder, who would replace Secretary Thomas Perez, began his career as general counsel at Fidelity National Financial, according to Puzder's 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.

U.S. Sen. Charles Schumer, D-New York, 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 overtime 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 a July 2014 Wall Street Journal editorial, saying the system would “destroy the business model” of the fast-food industry.

Marshall Babson, a partner at Seyfarth Shaw’s New York and Washington offices, who represents employers, sat on a panel with Puzder at a U.S. Chamber of Commerce event looking at the joint employer issue last spring. Babson said he was “very impressed” with the CEO’s understanding of the legal and business issues implicated by the expansion of the joint employer standard.

“He understands the adverse impacts that this overly aggressive and arguably unsupportable test can have on businesses,” Babson said, adding there’s “not a doubt” in his mind that Puzder would try to pull back the standard as head of the Labor Department.

Clear views on minimum wages, automation, ACA

Puzder has made his views clear on another hot-button issue—the minimum wage—as well. Although attempts to raise the wage have failed on a federal level, many states have voted to raise it—in some cases as high as $15 per hour.

In his Varney & Co appearance, Puzder said that “you raise the minimum wage but some jobs aren’t worth $15.” He has also talked about bringing down labor costs as minimum wage rises in some areas by possibly replacing some fast-food workers with automation at CKE restaurants.

"They're always polite, they always upsell, they never take a vacation,” he told Business Insider in March, speaking of the machines. “They never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case.”

Puzder has called for a repeal of the Affordable Care Act as well, putting him in line with other Trump nominees. Trump himself called for a repeal of the ACA on the campaign trail, but has since said he would keep parts of the ACA intact.

Steven Bernstein, a partner at Fisher & Phillips’ Tampa office who represents employers, said that as the first business leader in recent memory to head the department, Puzder’s leadership would be “unique and refreshing.”

Bernstein, who does not know Puzder personally, said there is a perception among employers that the Obama Labor Department was too quick to impose regulations without fully assessing job creation and costs. “It’s encouraging and new that perhaps we’ll see a leader who understand the importance of regulation in moderation,” he said.

Puzder’s nomination could pose questions about whether his tenure at the head of a major fast-food company poses conflicts of interest.

CKE Restaurants owns or franchises more than 3,250 restaurants in the U.S. and 26 foreign countries, generates $1.3 billion in annual revenue and with franchises employs more than 70,000 people in the U.S, according to the company’s website.

According to Bloomberg BNA, the DOL’s Wage and Hour Division’s database, which only includes closed investigations, shows that the division has looked into 108 CKE-affiliated stores since 2004, but the vast majority of stores investigated have been run by franchisees, not by the company itself. The department told Bloomberg there is one outstanding CKE wage and hour investigation against a Hardee’s that appears to be run by franchisees.

Jeff Hauser, executive director of the Revolving Door Project at the Center for Economic and Policy Research, said that although Puzder could sidestep some of the legal concerns around his chief executive position by divesting his holdings in CKE or creating a blind trust, he is still “inextricably connected” to the company and industry on other ways, even if his money is not.

“Do I think that someone can retain an interest in the company even after being divested when they are as closely tied reputationally [to that company] as Puzder is?” said Hauser. “I would say, ‘Yes.’ ”

Instant Insights /

Fast-food CEO and regulation foe Andrew Puzder is DOL nominee

More From HR Executive

Related Stories

Recommended For You