Fast-Food CEO Presents Big Shift at Trump’s DOL

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By Ben Penn and Tyrone Richardson

Dec. 8 — President-elect Donald Trump’s selection of fast-food CEO Andrew Puzder as labor secretary offers tangible insights into how the Labor Department may change direction from the Barack Obama and Thomas Perez regime.

The man at the helm of the Hardee’s and Carl’s Jr. brands is not your typical fast-food executive in the sense that his detailed views on labor policy and government regulation are all available on his blog, public speaking transcripts, columns and in a book he co-wrote on job creation (see related story). In summary, Puzder’s public record seems to portend a dramatic reversal in the DOL’s current priorities to enhance employees’ wages, safety and benefits via regulation.

But Puzder, like the president-elect, has no government experience, and his statements could morph once he takes office. Seth Harris, Obama’s former deputy labor secretary, cautioned that even though Puzder’s corporate background ostensibly contravenes the DOL’s mission to promote workers’ rights, his approach to governance remains an open question.

“I think it’s premature to draw any broad conclusions from the fact that he happens to lead a fast-food business right now,” Harris, who left the DOL in 2014 and now practices law at Dentons in Washington, told Bloomberg BNA Dec. 8. “It is entirely possible that he will continue the tradition of bipartisanship on workforce development and retirement policy, for example. We just don’t know that yet.”

Leading members of the worker advocacy movement, in a call for reporters, expressed grave concerns about Puzder’s past statements, such as opposing big minimum wage hikes and expanded access to overtime pay (see related story). They called for Congress to put Puzder to the test during his confirmation.

Return to GOP Norms

Matthew Haller, senior vice president at the International Franchise Association—where Puzder is currently a board member—told Bloomberg BNA Dec. 8 that it’s a false assumption that Puzder’s anti-regulatory comments indicate he would direct the DOL not to pursue further regulations.

At the same time, Puzder’s business acumen likely means that employers can expect an enforcement philosophy centered on compliance assistance and clearer responses to specific business questions, several sources said. One concrete way this could manifest itself is through a withdrawal of controversial administrator’s interpretations, such as a Wage and Hour Division memo stating that the Fair Labor Standards Act provides for a broad meaning of joint employment.

Instead, Puzder will be advised to restore the Republican DOL practice, abandoned under Obama, of issuing opinion letters that respond to individual employer complaints.

“I do think that advisory opinions will be more the norm than governing by the gotcha mentality, which we felt was part of the norm in this administration, especially at DOL with targeted enforcement,” Haller said.

In other words, the employers longing for a return to the days of an adversarial relationship with the DOL and a sense of predictability are thrilled at the prospect of a labor chief who intimately understands their perspective.

“I think that the reaction is one of relief to restaurants because during the last eight years restaurants and most other businesses have felt the people at the Department of Labor simply do not understand their business and do not have a realistic appreciation for the consequences of Department of Labor actions on their businesses and on their employees,” Paul DeCamp, who ran the DOL’s WHD under George W. Bush, told Bloomberg BNA Dec. 8 (see related story).

Trump’s Populism Tested

The unpredictability of how Trump and Puzder will direct the DOL is rooted in more than just their lack of public sector experience. Even with a fast-food executive at the helm, Trump’s DOL will still face pressure to fulfill the populist message that convinced some working-class Democrats and union members to break from party allegiances.

“The Labor Department is one of the principal places where Donald Trump’s populism will be tested,” said Harris, who briefly served as Obama’s acting labor secretary. “Does secretary-designate Puzder have a strategy for helping the president to create millions or tens of millions of middle wage or middle skill jobs that will help rebuild the American middle class? And will he be both willing and able to use the tools that are available to him in the Labor Department, which include employment law enforcement and compliance to strengthen the middle class?”

The importance of appealing to lower-wage workers is reflected in the Trump transition team’s official statement announcing Puzder’s appointment. Within one sentence, the president-elect’s message attempted to strike a balance between Puzder’s ability to lift worker conditions and reduce red-tape for businesses.

“Andy will fight to make American workers safer and more prosperous by enforcing fair occupational safety standards and ensuring workers receive the benefits they deserve, and he will save small businesses from the crushing burdens of unnecessary regulations that are stunting job growth and suppressing wages,” Trump said in the statement.

Democrats Pounce

Capitol Hill Democrats were quick to conclude that Puzder’s appointment is inapproriate, previewing the arguments they are likely to make during his Senate confirmation.

Some House and Senate Democrats Dec. 8 described the nomination as an attempt to convince them to back off on efforts to raise wages and said Puzder would tilt labor regulations in favor of corporations.

“I think this is more evidence that Donald Trump is not on the side of the workers,” Rep. Mark Takano (D-Calif.) told Bloomberg BNA. “He’s contrary to wanting to unrig the government, and unrig the rules that have hurt working-class Americans. This appointment is evidence that he likes regulation when they work against the ordinary Americans and rigged in favor of big corporate interests.”

Takano, who sits on the House Education and the Workforce Committee, said Puzder’s history in the fast-food industry shows that Trump is seeking “to squeeze the working class person.”

Other Democrats described the appointee’s statements on wages and health insurance as a “signal” Trump is pushing away from a campaign promise to champion for working families.

“At the outset, I am deeply concerned by Mr. Puzder’s record of standing in the way of progress on issues that would make an immediate difference in the lives of working families, in particular raising the minimum wage and ensuring equal pay for equal work,” Sen. Patty Murray, the Health, Education, Labor and Pensions Committee’s ranking Democrat said in a written statement. “And I have serious questions about whether a CEO who is comfortable reinforcing harmful stereotypes about women and who is so dismissive of workplace discrimination issues can be trusted to uphold core missions of the Department.”

Rep. Raul Grijalva, also on the Committee on Education and the Workforce, described Puzder as an “ideological placement” similar to his appointees at the Department of Education and EPA.

“They’re coming in with an agenda, and those are where the flare-ups and real battles are going to happen all the way down the line because it’s not the State Department that is not going to be the domestic battleground, it’s going to be these three areas,” he said.

Grijalva said that the three selections seemed to been chosen by Vice President-elect Mike Pence, following an ideology when he was a member of Congress years prior.

“There’s the ideological agenda that is coming in. Those are the ones that Pence wanted because that’s been his style here,” he said. “So he brings in his troops into these areas, they’re all domestic and they all deal with poverty, they deal with low-skill workers, low wage workers and they deal with the housing and those kind of support systems.”

It was not immediately known Dec. 8 how many House and Senate Republicans viewed the appointee. Many members declined to comment when reached by Bloomberg BNA Dec. 8 because Puzder’s appointment was not yet official.

After Trump announced the appointment late Dec. 8, Rep. Virginia Foxx (R-N.C.), chairwoman-designate of the House Education and the Workforce Committee, in a statement called Puzder “a terrific choice.”

“Through a long, distinguished career in the private sector, Mr. Puzder has a deep understanding of what it takes to create good-paying jobs and how federal policies can affect the ability of workers and employers to succeed.”

To contact the reporters on this story: Ben Penn in Washington at bpenn@bna.comand Tyrone Richardson in Washington at trichardson@bna.comTo 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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