Puzder Hearing Forecast: Stormy With a Chance of Labor Policy

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By Ben Penn

By the time senators finish questioning Andrew Puzder on his fast-food company’s racy ads, his undocumented housekeeper and allegations of domestic violence, they may not get to critical inquiries about a Trump Labor Department.

Puzder’s long-awaited confirmation hearing scheduled for Feb. 16 comes amid intensifying antagonism over the chief executive officer of CKE Restaurants Inc.—parent company of Hardee’s and Carl’s Jr.—and is likely to feature some testy exchanges. A stack of opposition research has grown over the past five weeks of hearing delays, while a handful of GOP senators say they still aren’t sure if they will support the labor secretary nominee.

Senators from both parties are expected to focus questions on revelations that Puzder employed an undocumented immigrant in his home for years without paying taxes and that his ex-wife accused him of domestic violence during their divorce, only to later withdraw the claim. Will that leave room for Puzder, who has never served in government, to detail how he’d control the DOL’s vast array of workforce levers, covering anything from youth employment training to retiree pension security?

“That’s a good question,” Bill Samuel, government affairs director at the AFL-CIO, told Bloomberg BNA. “The agency has a very diverse mission. There are lots of important topics that should be covered and it will be hard to cover all of them given that there have been very controversial statements Puzder’s made with respect to women, minimum wage and overtime pay. It may be hard for senators to get to all the questions they want to get to and need to get to.”

High-profile Democratic caucus members on the Health, Education, Labor and Pensions Committee, including Sens. Elizabeth Warren (Mass.) and Bernie Sanders (I-Vt.), see Puzder as perhaps the only remaining Trump Cabinet pick they have a shot at blocking. At least three Republicans would have to oppose Puzder on the Senate floor to make that happen, which remains a long shot.

‘Theatrical Points’ May Distract

Advocates on both sides of the aisle are hopeful, though not necessarily optimistic, that the committee hearing and potential Senate floor debate will offer a full vetting of how Puzder would direct enforcement of wage-and-hour, occupational safety and other laws. They’re also eager to find out how he might handle two significant DOL regulations issued last year—the fiduciary and overtime rules—that the new administration is already reconsidering.

“Senators are going to have to carefully decide how much of their time they want to spend on sort of the theatrical points that are outside of questions of administration of the department and how much of their time that they want to focus on the actual policy issues that Mr. Puzder will be called on to address in the event that he’s confirmed,” Gregory Jacob, the solicitor of labor for George W. Bush’s DOL, told Bloomberg BNA.

If the senators focus their time on the side issues, “those are fundraising questions,” said Jacob, now a partner representing employers at O’Melveny & Myers LLP in Washington.

CKE Record Linked to DOL

Puzder is unlikely to offer specifics, especially on regulations tied up in litigation. Still, some questions about CKE’s business record are linked to his potential labor secretary responsibilities.

“It comes back to whether he’s going to have any credibility in this job to fulfill the mission of the agency in light of how he’s handled his commitments in the private sector,” Sharon Block, who was a senior counselor to Obama administration Labor Secretary Thomas Perez, told Bloomberg BNA. “I think that those two things are completely intertwined.”

The DOL’s Wage and Hour Division and Occupational Safety and Health Administration have investigated dozens of Hardee’s and Carl’s Jr. restaurants in recent years, leading to fines assessed and back wages collected. Those inspections mostly took place at franchised stores not directly owned by CKE. The WHD audited other large fast-food chains far more frequently.

Puzder, like past labor secretary nominees, will probably be reluctant to offer too many specifics on decisions he’d make at the agency. That’s why senators may find it a more efficient use of their time to probe him on his company’s record.

“The artful nominee always knows how to answer those questions” about agency specifics “without making too much of a commitment,” Chris Lu, deputy labor secretary under Obama, told Bloomberg BNA. “If I were the Democrats, I would focus on his business record, and I think that’s what they’ll go after.”

Hints of Reagan Labor Chief

Despite the concerns expressed by a few HELP Committee Republicans , including Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska), most GOP lawmakers favor Puzder’s business-minded approach. They align with his lengthy record criticizing Obama’s labor agenda as overreaching. This includes efforts to expand overtime coverage to 4 million workers and to substantially raise the national minimum wage.

Some of those members are likely to rush to Puzder’s defense when he gets grilled on CKE’s labor practices.

“I do expect Republicans to give him a chance to say some of the positive things about CKE Restaurants, for them to say that most employees are satisfied” and some were “promoted to managers,” Andrew Stettner, a senior fellow at the Century Foundation, told Bloomberg BNA.

Stettner, who recently researched decades of previous Republican labor secretary confirmation hearings, found the closest parallels to Puzder in Ronald Reagan nominee Raymond Donovan, a construction executive.

At Donovan’s hearing, “he was immensely prepared. He had stacks of papers with all the OSHA complaints and NLRB complaints” his company faced, “and there was an effort to go through them in some detail at the hearing,” Stettner said. “I think Puzder’s going to have to litigate this record at CKE” as well.

The Senate confirmed Donovan, who was labor secretary from 1981-1985.

Time to Chat Enforcement?

Without a confirmed secretary, labor and employment attorneys have been cautious to assume that a Republican-controlled DOL would return to the compliance assistance blueprint from Elaine Chao, the most recent GOP labor secretary.

David Fortney, an acting labor solicitor under George H.W. Bush, said he’s most curious to hear Puzder elaborate on this front.

“What is his approach with respect to enforcement agencies?” said Fortney, co-founder of management law firm Fortney & Scott LLC in Washington. “Will we return to agencies being able to offer guidance on compliance—whether it’s Wage and Hour Division opinion letters, the OFCCP recognizing exemplary programs, OSHA having a program for highly compliant employers?”

“Those are all worthwhile questions because it goes to a philosophy of how to effectively use the department’s resources,” he said.

Obama’s DOL enforcement agencies also aided employers with compliance, but employers and Republicans felt the balance shifted too far to the side of playing “gotcha” with investigations.

Allies Want Puzder to Break Silence

Puzder’s industry allies are looking forward to his hearing as a chance for him to finally break weeks of silence and prove his labor knowledge.

Executives with the International Franchise Association, National Restaurant Association and National Council of Chain Restaurants all know Puzder personally through his outspoken participation in their organizations. They all told Bloomberg BNA that his views are more moderate than the anti-labor philosophy presented by opponents and the media.

As much as they’re hopeful that the hearing will demonstrate Puzder’s preparedness for the job and respect for the agency, the trade lobbyists know the controversies will likely take center stage.

“A broader review of the DOL portfolio through the question and answer would allow senators to understand Andy’s depth of understanding of the department’s mission,” Rob Green, executive director of NCCR, told Bloomberg BNA. “The way the hearing is shaping up, I’m not confident that those issues will be raised in a constructive way.”

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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