Hardee’s, Carl’s Jr. Franchisees Hit With Wage, Bias Claims

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By Jon Steingart

Fast-food workers filed claims against franchisees of CKE Restaurants Inc. in 10 states, according to copies of charging documents obtained by Bloomberg BNA. CKE Restaurants' chief executive officer is Andy Puzder, President Donald Trump’s pick for labor secretary.

Hardee’s and Carl’s Jr. franchisees were hit with complaints alleging wage-and-hour violations, sexual harassment and intimidation for union-related activity, according to a Bloomberg BNA review of the documents. At least one claim among those filed with state and federal agencies accuses the franchisee of restricting workers’ activity under a franchise agreement with CKE.

The workers filed claims with the Equal Employment Opportunity Commission, National Labor Relations Board, U.S. Department of Labor and state labor agencies. Allegations include not being paid for all hours worked, having to deal with leering customers, and being told not to speak with the press. Some workers received assistance from Fight for $15, a worker advocacy organization, or its affiliated groups.

A Republican aide on the Senate Health, Education, Labor and Pensions Committee told Bloomberg BNA Jan. 26 Puzder’s confirmation hearing would be delayed five days, to Feb. 7, to give Puzder more time to submit required disclosures (see related story). The claims by the fast-food workers were announced later the same day.

CKE Should Share Responsibility, Advocate Urges

CKE should bear some responsibility because it chooses its franchisees, Cathy Ruckelshaus, general counsel and program director for the National Employment Law Project, told Bloomberg BNA Jan 26. Regarding the wage claims against the companies, for example, “if they can’t pay, then CKE is making low-road decisions about who it franchises with,” she said.

“The magnitude of these violations and the pervasiveness of them is that the culture of the company is not complying with laws,” Ruckelshaus told reporters in a Jan. 26 conference call.

A CKE spokesperson told Bloomberg BNA the company and its franchises are separate. “While we do not comment on pending litigation, we’d like to offer a reminder that CKE Restaurants is nearly 95% franchised,” the spokesperson said in a Jan. 26 e-mail. “Each of these 2,769 franchise stores are run independently and solely responsible for their employees, management and adherence to regulations and labor practices.”

Representatives for most of the franchisees couldn’t be reached for comment Jan. 26.

Rick Rountree, a spokesman for Boddie-Noell Enterprises, a Hardee’s franchisee, provided Bloomberg BNA with a statement that said the company “is unaware of any complaints being filed against the company regarding alleged unfair labor or pay practices. As a family-owned operator of Hardee’s restaurants for 55 years, we value our strong, positive relationship with our employees and are in full compliance with state and federal labor regulations.”

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; Christopher Opfer at copfer@bna.com

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