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Dec. 8 — Andrew F. Puzder, President-elect Donald Trump’s choice for secretary of labor, has been a vocal critic of the National Labor Relations Board, particularly its 2015 expansion of the joint employer standard.
Puzder has argued that the expanded standard poses a threat to U.S. franchise business models and that it may compromise entrepreneurial opportunities for women, minorities and veterans.
Puzder currently heads CKE Restaurants Inc., parent of the Hardee’s and Carl’s Jr. chains. The CKE companies have had relatively few cases before the NLRB, but the executive has argued that applying the board’s Browning-Ferris ruling to restaurant franchises could damage businesses that have generated jobs in communities across the country.
The NLRB has processed only 16 unfair labor practice charges since 2006 that named CKE Restaurants, Carl’s Jr. or Hardee’s as employers, according to the labor-management agency’s online docket records.
All of the cases were withdrawn or dismissed; none of them remain open and none resulted in decisions by the agency’s five-seat board.
Puzder has been president and chief executive officer of CKE since 2000.
While the CKE businesses have had little contact with the NLRB during Puzder’s tenure with the food company, the executive has been vocal in questioning the NLRB’s 3-2 decision in Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186, 204 LRRM 1154 (2015).
In Browning-Ferris, the board held that a recycling plant operator and a staffing company could be considered joint employers because they shared or co-determined matters governing the essential employment terms and conditions of workers provided by the staffing company. One organization retaining indirect control over an employment relationship may be sufficient to show joint employer status even if the control hasn’t been exercised, the board found.
Industry groups opposed the NLRB’s new standard, which reversed a 30-year-old requirement that joint employer liability had to be supported by showing two companies shared direct, actual control over a group of employees.
Puzder appeared in June 2014 before the House Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions and testified that business franchising had “proven enormously successful at enabling individuals to own and operate their own businesses, creating substantial economic growth and jobs.” He told the House panel that changing the NLRB standard to make franchisers liable for the acts of franchisees “would significantly and negatively impact both the franchise business model and the small businessmen and businesswomen who have invested the time, energy and money in the hopes of becoming successful franchisees.”
In an address at a U.S. Chamber of Commerce conference in March 2015, Puzder warned that expanding joint employer standards under the National Labor Relations Act and other laws would convince franchisers they had to exercise more control over local franchises and might prompt them to demand higher royalties from franchisees to cover the increased cost of closely supervising local stores.
If franchisers take more control, Puzder predicted, buying a franchise would only be “buying yourself a job” and franchisees would no longer be “living the American dream.”
To contact the reporter on this story: Lawrence E. Dubé in Washington at firstname.lastname@example.org
Andrew Puzder’s written testimony before the House subcommittee is available at http://edworkforce.house.gov/UploadedFiles/Puzder_Testimony_revised.pdf.
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