Centrist Republican Undecided About Trump’s Labor Pick

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By Ben Penn

Andrew Puzder’s Cabinet confirmation, to the extent it’s vulnerable, could hinge on a moderate Maine Republican with reservations about the controversial labor secretary nominee.

“It’s way too early for me to make a decision on that,” Sen. Susan Collins (R-Maine) told Bloomberg BNA on whether she would vote for Puzder after a panel hearing scheduled for Feb. 2. “I want to discuss allegations concerning the Fair Labor Standards Act that some of his franchisees have been accused of.”

The centrist Collins could hold the swing vote in the Health, Education, Labor and Pensions Committee, where Republicans have a 12-11 majority. The remaining members are generally considered less likely to break from their caucus when determining whether to clear the fast-food executive for Senate floor debate.

Puzder, the chief executive officer of CKE Restaurants Inc., has been a vocal critic of government regulation such as the Labor Department’s pending rule to make some 4 million workers newly eligible for overtime pay. He’s also drawn some flak from worker advocates for claims of “wage theft” at Hardee’s and Carl’s Jr. restaurants, 94 percent of which are independent CKE franchisees.

The GOP-controlled Senate is expected to eventually confirm President Donald Trump’s choice, but a no vote from Collins during committee proceedings could derail the nomination.

Puzder’s business allies have been hard at work shoring up support among HELP members. They say they’re confident Collins will come around.

“We have close relations with Collins’ office, and we are on a good course,” a restaurant industry lobbyist told Bloomberg BNA. “We have not heard any concerns.”

Collins Uncertain After Meeting Puzder

Collins recently met with Puzder at her office, but the senator said her decision will also be shaped by a number of issues likely to come up at his confirmation hearing.

The alleged workplace violations at Hardee’s and Carl’s Jr. stores operated by CKE are particularly of interest, as is workforce training, Collins said. As labor secretary, he would be responsible for enforcing wage and safety laws, among other worker protection statutes.

A Bloomberg BNA analysis of the DOL’s public enforcement database shows the agency’s Wage and Hour Division conducted 108 investigations at CKE-affiliated stores dating back to 2004. Those inquiries resulted in the outlets agreeing to pay $153,921 in back wages for 936 employees, mostly from minimum wage and overtime violations.

Compared with other fast-food chains, Carl’s Jr. and Hardee’s received much less scrutiny, with far fewer violations and penalties, the analysis of concluded federal cases shows.

Most of the CKE cases were conducted at franchisees, and the handful of corporate-run stores audited during the Obama administration weren’t found to have violated the law.

However, a review of the database that extends to the George W. Bush administration shows that the brands’ largest overall FLSA settlement was with a corporate-run store for $58,000, involving overtime violations from 2004 through 2006. Puzder has been CEO since 2000.

Collins’ interpretation of these violations and others alleged in private lawsuits could be a determining factor. “I want in particular to distinguish whether those violations were found in the restaurants he directly operated or were they franchisees. That’s a big difference,” she said in an interview.

Collins told Bloomberg BNA that Puzder is a “very successful CEO who is new to government, and we talked about that to some extent.”

“I think the scrutiny and the questions are not something he’s used to encountering,” she added.

‘Strong Support’ Among Republicans

Puzder’s hearing has already been delayed twice, allowing for continued media and advocacy reports alleging workplace discrimination at CKE restaurants. His industry allies have returned those attacks by arguing that Puzder’s employees have high levels of job satisfaction and that the CEO has created thousands of jobs at his restaurants.

The labor nominee is receiving further criticism for his burger chains’ advertisements featuring women in bikinis, a campaign Puzder has spoken of with pride. That argument may persuade Collins, who last year cited Trump’s treatment of women as a reason she wouldn’t vote for him.

Sen. Lamar Alexander (R-Tenn.), chairman of the HELP committee, said he’s not concerned that the opposition could gain momentum in the next week, as the public still awaits his financial, criminal and ethics disclosures.

“I think most people who know Andy Puzder know he’s a very accomplished person and he’ll be an excellent witness before the committee,” Alexander told Bloomberg BNA. “And the Republicans strongly support him.”

Business lobbying groups, such as the International Franchise Association and the National Restaurant Association, are eager to have one of their members leave the private sector for a spot in Trump’s Cabinet. If his confirmation were blocked, it would mark a setback in employers’ efforts to establish what they say would be a less adversarial relationship with the DOL.

But it would also represent a major victory for Democrats, who are expending tremendous energy to try to take down at least one of Trump’s Cabinet picks.

Democrats want to cast Puzder and other nominees as contradictory to Trump’s working-class campaign rhetoric. If there’s any chance the Puzder controversy could gain momentum and make a Republican senator or two uncomfortable with supporting him, it could come from his potential conflicts of interest or perhaps a surprise in his FBI background check.

Puzder filed his paperwork with the Office of Government Ethics in early January, but the independent agency is still reviewing his filing.

“The only thing I’ve heard is the conflicts of interest and the business unwindings are very complicated for him,” Sen. Sheldon Whitehouse (D-R.I.), a HELP committee member, told Bloomberg BNA.

Lobbyists Dispute Vulnerability

Industry lobbyists aren’t buying the idea that any GOP HELP member is ready to vote nay.

“We expect Andy’s hearing to go well next week,” Cicely Simpson, executive vice president of government affairs and policy at the National Restaurant Association, told Bloomberg BNA. “We have been in touch with members of the Senate and we’re anticipating a good hearing—a thorough vetting, but we anticipate it to go well.”

Simpson, a former Dunkin’ Brands lobbyist, said she’s known Puzder for about seven years and has remained in frequent contact with him over the past several weeks.

Even after mounting speculation that Rex Tillerson could be blocked, the GOP caucus ultimately held strong and confirmed him as secretary of state.

“This caucus really wants to move people through. I think if you’re Mr. Puzder, there’s a very troubling record,” Judy Conti, federal advocacy coordinator at the worker advocacy group National Employment Law Center, told Bloomberg BNA. “I do believe that there are at least a few Republicans on the HELP committee that are paying very close attention and have some concerns.”

If he becomes labor secretary, the effort to oppose him wouldn’t be for naught, Conti said. “I expect if he gets confirmed,” the Republicans with concerns “will join the Democrats in making sure there is very vigorous oversight of the Department of Labor.”

In addition to Collins, Sen. Lisa Murkowski (R-Alaska) is seen as a possible target of the lobbyists in search of a GOP defector. Murkowski’s office didn’t respond to a message seeking comment.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

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

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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