Workers Say Andrew Puzder Is ‘Not the One to Protect’ Them, But He’s Been Chosen To
At first, Andrew F. Puzder’s California story sounds like one of the state’s sunny dreams come true: Midwestern lawyer stumbles into burger business, nurses storied chain back to health, wins industry plaudits and record profits.
But Mr. Puzder became an outspoken critic of his adopted state because of its vigorous workplace regulations. The mandatory rest breaks required by California made no sense, he felt, leaving restaurants understaffed when a rush of customers came in. His company paid millions of dollars to settle class-action lawsuits that accused it of cheating workers.
He spoke out against labor laws intended to benefit hourly workers like the ones who serve shakes and mop floors at Carl’s Jr. and Hardee’s, the chains he runs.
“California has gone really from being this golden state, the state of opportunity, to being a kind of nanny state,” he said in 2009. “You can’t be a capitalist in this state.”
In the months before California passed a law last year raising the minimum wage to $15 by 2022, many business leaders kept their objections discreet, but Mr. Puzder was blunt: “How do you pay somebody $15 an hour to scoop ice cream? How good could you be at scooping ice cream?” he asked.
Now Mr. Puzder is relocating his corporate headquarters to Tennessee — and planning his own move to Washington, to become President-elect Donald J. Trump’s labor secretary. His nomination is moving slowly, with confirmation hearings pushed back indefinitely, allowing Democrats and labor advocates to prepare a drumbeat of questions: Can the head of a company accused of shortchanging workers serve as their champion? Does Mr. Puzder want to lead the Labor Department, or dismantle it? Will he enforce rules his company has been accused of violating? How will Mr. Trump make good on his vision of capitalism that is unfettered by regulations, yet also helps those left behind?
Guadalupe Urrustieta, 47, said that when he was a manager at two Carl’s Jr. locations north of Los Angeles, he was routinely asked by supervisors to make his employees work through unpaid meal breaks without compensation, so that labor costs would not go up. He said he also had to work several hours a week without pay.
“I left the company because I didn’t agree with a lot of the things that were happening,” Mr. Urrustieta said. To him, Mr. Puzder is an improbable labor secretary, “not the one to protect workers.”
The company headed by Mr. Puzder, CKE Restaurants, says its practices follow the law. “We have a very strict policy of compliance with California wage and hour laws and cannot comment on unsubstantiated allegations of current or former employees,” said Charles A. Seigel III, the vice president and general counsel.
Mr. Puzder, who declined to be interviewed for this article, argues that his efforts to reward workers in more entrepreneurial ways were stymied by rigid California laws. He has said that he may support smaller minimum-wage increases, but that over all, the free market is better than the government is at helping people.
“Andy Puzder has firsthand experience saving and creating thousands of jobs, and he has an extensive record of fighting for workers,” the Trump transition team said. “As secretary of labor, he will be able to apply his business successes in a way that will benefit all Americans — growing wages and creating opportunity.”
But Mr. Puzder’s appointment, already inspiring protests, could set off a national clash. In recent years, a resurgent workers’ rights movement has helped win an employer mandate for health insurance and stronger enforcement of overtime rules nationwide, and paid sick and family leave at the local and state levels. Mr. Puzder, opposed to some of those policies, could lead a backlash by business owners saying the new rules have gone too far.
If employers are required to do too much, he told Business Insider recently, they may replace some workers with machines. “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,” he said.
Burgers and Bikinis
Mr. Puzder entered the fast-food world almost by chance. A lawyer with a canny, strategic streak, practicing commercial trial law in St. Louis, he had a sideline in anti-abortion activism, writing a legal argument that helped inspire a 1986 state law that declared that life began at conception and prohibited the use of state money for abortions. A challenge to the law rose all the way to the United States Supreme Court, leading to a 1989 decision narrowing the scope of Roe v. Wade.
Around the same time, Mr. Puzder took a legal assignment from Carl Karcher, who started with a single hot dog cart and expanded it into the Carl’s Jr. chain, with hundreds of restaurants in California, their drive-ins emblazoned with smiling yellow stars. Mr. Karcher was in legal and financial trouble, and as his new lawyer worked to bail him out, the two became close. Mr. Puzder helped Mr. Karcher avoid bankruptcy; Mr. Karcher taught Mr. Puzder the restaurant business. By 2000, Mr. Puzder, who later referred to Mr. Karcher as “a second father,” was chief executive.
In Mr. Puzder’s version, the following years were triumphant. His franchise restaurants outside California grew exponentially. His associates had acquired the Hardee’s chain, a move that initially fell flat, until Mr. Puzder revived the brand. (“No more people behind the counter unless they have all their teeth,” he recounted years later.) Other fast-food brands aimed for the broadest appeal, sometimes losing focus, but Mr. Puzder concentrated on one market: young men delighted to pay $6 for calorie-laden burgers dripping with sauce. Intelevision ads that were somewhere between racy and pornographic, bikini-clad models suggestively crunched and licked their way through burgers. (A “bacon lover’s fantasy” featured three models and a “bacon three-way burger.”)
The conservative Parents Television Council criticized the ads and, more recently, Democrats have said they prove a lack of respect for women. But Mr. Puzder has defended them. “I like beautiful women eating burgers in bikinis,” he told Entrepreneur magazine. “I think it’s very American. I used to hear brands take on the personality of the C.E.O. And I rarely thought that was true, but I think this one, in this case, it kind of did take on my personality.”
A CKE representative said that about 70,000 employees now work in 3,600 restaurants, 95 percent of them franchises, generating more than $1.3 billion in revenue. The representative said the company had no control over how employees are treated in franchised locations, but labor groups tend to dismiss that logic, saying the chains use it to avoid responsibility.
Mr. Puzder traveled to hundreds of stores to talk with employees about what they did and how, said Eric Williams, who was formerly director of training at Hardee’s and is now the chief operating officer for CKE. He made a practice of ducking behind the counter and asking employees how long they had been working at the company, whether they had been given proper training and whether their work schedule was what they had expected, Mr. Williams said.
Mr. Puzder “wants to get as much bureaucracy out of the company as possible so that employees can feel free to call the C.E.O.,” Mr. Williams said. “He wants to make sure that the workers are treated fairly, and he wants them happy.”
Understaffed, Underpaid
In nearly two dozen interviews across California, some current and former employees at Carl’s Jr. restaurants described a workplace that was “basically fair,” as Tony Moua, a former cook from Merced, put it. “We were always paid on time and had to take our breaks,” he said.
But most offered a different version: restaurants so understaffed they could barely keep up; having their hours cut so their employer would not be required to provide insurance under the Affordable Care Act; and being sent home midshift if the crowds thinned.
“If it was a slow day, I wouldn’t even work for four hours,” said Cristo Delgado, who worked at a Carl’s Jr. in Bakersfield in 2010. “They would lose money if we stayed.”
“I never complained,” he said. “I didn’t know I could complain.”
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In interviews and lawsuits, workers have made a graver charge: that the restaurants often broke the law by cheating them on their wages. Some said they were expected to arrive early for their shifts to clean but were not allowed to clock in until later.
Others said they would often work through their breaks, even though those rest periods, required by California law, were unpaid. When Tracy Bradshaw, who worked in a Carl’s Jr. in Bakersfield for two years, would take her 30-minute lunch break, she was often called back into the kitchen to help with a sudden rush.
“I need you back here now, I know you are on your break,” she said her manager would say. If she refused, the manager was more likely to send her home early, she said, which often meant fewer hours the next week, leaving her short on money.
After several months, Ms. Bradshaw said, she complained. Soon after that, she brought in paperwork showing that her pregnancy would prevent her from doing certain tasks. A week later, she was let go, she said. A CKE representative said the company is opposed to all forms of discrimination, including pregnancy-related.
During Mr. Puzder’s tenure, the company has paid millions of dollars to settle class-action lawsuits alleging that it failed to pay managers fairly, by misclassifying them in a way that skirted overtime rules. CKE has also faced other class-action lawsuits, some settled and others ongoing, alleging that it routinely forced workers to skip breaks, altered its time records in a way that left workers paid less, or placed caps on what managers could make, meaning they worked for more hours than they were compensated for.
A CKE lawyer declined to comment on the lawsuits, saying only that it was often less expensive to settle cases out of court.
Mr. Urrustieta, the former manager near Los Angeles, who is part of a current lawsuit, said he would often work 60 hours a week, dealing with early-morning and late-night emergencies, and problems that cropped up on his day off. But he and other managers said Carl’s Jr. had rules against paying them for more than 47.5 hours a week. His district manager refused to pay him for all of the time he worked, he said.
Federal and state regulators have made similar findings, citing Carl’s Jr. and Hardee’s for wage violations in dozens of both corporate-owned and franchise stores, and requiring tens of thousands of dollars in back pay. (Many chains have records that are worse.)
David Weil, head of the agency’s Wage and Hour Division, declined to speak about the investigations of CKE in an interview. But the core mission of the Labor Department is “a fair day’s pay for a fair day’s work,” he said.
Corporation as Victim
Mr. Puzder has contended that the California rules defy business logic. The mandatory breaks, for example, meant workers were sometimes unavailable when they were needed most.
“Have you ever been to a fast-food restaurant and the employees are sitting and you wonder, ‘Why are they sitting?’” he asked in a 2009 interview, conducted by Allison Varzally, a history professor at California State University, Fullerton. Even if a bus pulls up filled with hungry customers, an employee on a break cannot assist, he said.
For several years, managers and assistant managers were given bonuses based on sales in their stores, giving top performers a share of the profit, said Bill Foley, a former CKE chairman, but in light of California rules over who could be considered a manager and required overtime pay, the company scrapped the practice.
In Mr. Puzder’s view of the lawsuits, his corporation was the victim. “Lawyers support state politicians out of profits from class-action lawsuits, and once they’re elected, lobby those politicians to pass more restrictive laws that they can use in their next raid on the California business community,” he said in a 2014 speech.
Mr. Puzder, exasperated, found himself more interested in politics. He made appearances at conservative events and wrote opinion pieces for The Wall Street Journal arguing that excessive regulation was stifling economic growth and forcing stores to close locations. In the 2016 presidential race, he and his wife gave over $170,000 in support of Mr. Trump’s campaign, most of it right as he secured the nomination.
With Republicans controlling the Senate, Mr. Puzder’s chances for confirmation remain high. Some chief executives have celebrated the appointment, confident Mr. Puzder will run a very different Labor Department from his predecessors.
“There are so many regulations imposed by politicians who have never run a business,” said David Newton, an entrepreneurship professor who co-wrote a 2010 book with Mr. Puzder, “Job Creation: How It Really Works and Why Government Doesn’t Understand It.”
Once Mr. Puzder steps into his new role, Mr. Newton said, business leaders will know “there’s someone who is like us and understands what we’re up against.”
P.C: https://www.nytimes.com/2017/01/15/us/politics/andrew-puzder-labor-secretary.html
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