Burger CEO Familiar With Wage-and-Hour Issues

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By Jon Steingart

Dec. 8 — Andrew Puzder likely learned a thing or two about the wage-and-hour laws he would be expected to administer as labor secretary from his years as CEO of a fast-food company, but the value of that experience depends on who's weighing in.

“It turns out that we’re going to have a secretary who runs a company that has committed wage theft,” attorney Allen Graves told Bloomberg BNA Dec. 8. Graves represents store managers in California who are suing CKE Restaurants Inc. in a pair of wage-and-hour class actions. Puzder is the chief executive officer of the company, which owns the Hardee’s and Carl’s Jr. burger chains. Graves said his comments were based on allegations made in the pending litigation. He added that it still is not known how involved Puzder was with regard to allegations in the class action complaints.

Paul DeCamp, administrator of the DOL Wage and Hour Division under President George W. Bush, said Puzder’s experience positions him to help businesses comply with the laws. “What Andy Puzder brings to the table is a realistic appreciation for how businesses operate and how decisions get made in that environment,” DeCamp told Bloomberg BNA Dec. 8 in an e-mail.

“As long as he demonstrates an eagerness to advance the policies underlying the multitude of statutes the Department enforces, his presence at the Department should be a great thing for both businesses, especially small businesses, and workers, because he will be uniquely qualified to know how to translate legal compliance requirements into operational reality in the workplace,” DeCamp said.

President-elect Donald Trump announced Puzder as his choice to run the Department of Labor Dec. 8 (see related story).

Overtime Rule, Enforcement—New Future?

Adam Shah, senior policy analyst at Jobs With Justice, a worker advocacy group, said he thinks Puzder’s selection imperils the Obama administration’s effort to expand eligibility for overtime. “From what we’ve seen so far, his views on wage-and-hour issues haven’t been the forefront of the discussion. But he did himself come out against the overtime rule,” Shah told Bloomberg BNA Dec. 8.

The DOL finalized a rule in May that doubled the salary threshold below which workers are entitled to overtime—to $47,476 from $23,660.

Puzder wrote an op-ed for Forbes magazine the day the Obama administration announced the final overtime rule. “This new rule will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere,” Puzder said.

Shah took issue with Puzder’s criticism. “The idea that somebody could be paid a weekly or yearly salary at the level of the current DOL’s limit and be considered a management employee exempt from overtime wages is very troubling,” he said. The DOL estimated that the overtime rule would have boosted income for 4.2 million people. It was temporarily blocked Nov. 22 by a federal judge who said the department exceeded its authority in issuing it.

Trump’s campaign promises that he “would look out for workers rather than big businesses” don’t mesh with Puzder’s selection, Shah said. “By nominating the CEO of a business that relies on people who are paid below living wages, people who have to support families, that’s not what people are voting for,” he said.

Jonathan Keselenko, a partner in the Boston office of Foley Hoag LLP, expects Puzder’s selection to change the face of wage-and-hour enforcement. “The Department of Labor now absolutely gives employers no benefit of the doubt” in its investigations, said Keselenko, who serves as chair of the Wage and Hour Defense Institute, a professional association of employer-side attorneys.

States May Pick Up Enforcement Slack

“For those that are in states where there are Democrats running the relevant agency, I think you’re going to see the states pick up a lot of the enforcement activity,” Keselenko told Bloomberg BNA. Dec. 8.

He gave the example of Massachusetts, where the governor is a Republican but it’s the attorney general, a Democrat, who controls wage-and-hour enforcement.

“We’ll see more stepped-up efforts by the states,” Keselenko said. “I think the private bar will pick up a lot of what the federal government is doing.”

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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