Monday morning musings for workplace watchers
All the Puzder That’s Fit to Print | Watching Red State Democrats | Overtime Appeal
Ben Penn: Good morning, everyone, and welcome to the start of the workweek. Please forgive me, but I’m feeling a bit sluggish today after some investigative research into the Hardee’sMonster Biscuit. I’ve been assured by people who know these things that the biscuit pairs well with a hangover. For those of you looking forward to a relaxing week, you might want to hold off on that third cocktail at the office holiday party.
The labor and employment news fairies have been relentless this season. Unlike most folks who were caught off guard when we broke the news Thursday that Trump was tapping Andy Puzder as his labor secretary, Bloomberg Law readers heard whispers way back on Nov. 9 that the man behind the Hardee’s and Carl’s Jr. chains was a possibility.
Our work is now just beginning, as the DOL landing team starts preparations in earnest and we gear up for Puzder’s confirmation.
Chris Opfer: I’m interested in seeing how it goes when Puzder’s nomination eventually gets to the Senate for approval next year. Democrats will surely take the opportunity to give Puzder the business, but Republican majority support means he’s likely to move through the confirmation process fairly swiftly. This is probably a good time to remind everyone that Harry Reid changed the rules in 2013 to require only a majority vote to confirm most presidential appointments. Turns out that might have been a bad gamble for the Nevada Democrat, who’s riding off into the sunset of retirement this year.
What I want to know is whether any Democrats will also give Puzder the nod. There’s a lot for folks on the left not to like about the guy, including his stances on minimum wages, the overtime rule and workplace automation. But, there’s also at least a handful of Democrats from red and reddish states up for election in two years who may want to at least try to play nice with the Trump administration. If they’re willing to cross the aisle to put Puzder in the Frances Perkins Building, might they also support GOP-backed labor legislation? Possible moves to undo the NLRB’s new joint employer standard and halt “micro-union” recognition could be on the menu.
All three of the Democrats who joined Republicans to support a resolution to block the Labor Department’s fiduciary rule—Sens. Heidi Heitkamp (N.D.), John Tester (Mont.) and Joe Donnelly (Ind.)—are up for re-election in 2018. So are Claire McCaskill (Mo.) and Joe Manchin (W.Va.).
BP: Puzder won’t be the only DOL official that Dems try to put through the wringer. The Wage and Hour Division administrator nominee always provides for a controversial confirmation process because the division’s priorities are particularly politicized. Puzder’s been criticized for past comments opposing most minimum wage hikes, so his wage-and-hour chief’s background on wage growth will be put to the test.
Here are a few names we’re hearing floated as candidates to round out Puzder’s team:
Littler Mendelson’s Tammy McCutchen for deputy labor secretary or labor solicitor
Seyfarth Shaw’s Alex Passantino for a return as Wage and Hour Division administrator
Federal Labor Relations Authority Member Patrick Pizzella for deputy labor secretary
The common thread of course is that all three of those names held senior DOL posts the last time Republicans ran the executive branch. As a first-time government appointee, Puzder will have his hands full trying to get familiar with the agency’s inner workings and policies. And in his spare time he has a few vital decisions to make immediately regarding regulations left behind as a welcome gift from Tom Perez & Co. That’s why Puzder may want to fill those slots with nominees that have the experience and know-how to hit the ground running.
CO: Perhaps lost in all the Puzder news was the Fifth Circuit’s decision to expedite its review of a Texas judge’s ruling to put the overtime rule on hold. Bloomberg Law’s Jon Steingart is keeping an eye out for a Labor Department brief in the case, due Friday. It’s important because it gives DOL a chance to make its arguments to save the rule before Trump takes office and Puzder is sworn in. The Texas AFL-CIO is also looking to intervene in the case, to act as a backup in the event the Trump DOL decides not to fight it.
If we know one thing about the labor secretary in waiting, it’s that he doesn't like the overtime rule. You might say he’s not a big fan of government regulation in general.
Here’s a snippet from Puzder’s 2010 book: “Private enterprise, unencumbered by excessive government intervention, will create jobs. Period!”
As if following every twist and turn of the overtime litigation isn’t enough drama, Jon last week stopped by our corner suite on the bustling intersection of 18th and Bell to let us know he’s also going to try his hand as a movie critic. “’Office Christmas Party’" comes out this weekend, in which CEO Jennifer Aniston threatens to downsize, so Jason Bateman and his co-workers try to woo a client and save their jobs by throwing a festive bash,” Steingart told us. “I'll report back with tips for the rest of us and the latest intel on the price of popcorn (spoiler alert: it's high),” he says.
Me, I have this weird thing about films. I kind of prefer movies that have at least a slight chance of being … you know … good. “Road House” has to be on cable somewhere.
BP: Before we sign off, I have some parting words on Puzder. Among the many opposition talking appoints that emerged last week was that a recent analysis I did of WHD investigations showed that 60 percent of Hardee’s and Carl’s Jr. investigations yielded at least one Fair Labor Standards Act violation.
That’s a damning statistic that I’m sure will be cited again. But I owe it to the public record to provide a little more context.
There are multiple ways to slice and dice WHD enforcement statistics. No matter which one you select, it’s dangerous to conclude that the stores investigated represent the overall compliance rate for the more than 2,500 Hardee’s and Carl’s Jr. outlets in the U.S. I’m going to leave it up to people with master’s degrees in economics to opine on which stat is most telling, but here’s another one: The average back pay that Hardee’s and Carl’s Jr. owners (nearly all franchisees) agreed to pay per investigation since Obama took office was about $2,000, the third lowest total amount among the 20 largest fast-food brands. For comparison, Domino’s was #1 at roughly $13,000 collected per WHD case. Stay tuned.
CO: On that note, we’re punching out. But before we do, we’d like to give a special thanks to copy editor Cathie Schoultz. Anyone who has ever met Ben and me in person knows that we’re not nearly as lucid, engaging or grammatically correct as Cathie has managed to make us in this column. For that, we owe her a tip of the hat.
Daily Labor Report subscribers can check back in with us during the week for Ben’s reporting on Hardee’s and Carl’s Jr. wage and hour enforcement. Bloomberg Law reporter Tyrone Richardson will also be looking at organized labor’s role (if any) in Trump trade policy.
See you back here next Monday morning.
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