Industry News | December 8, 2016 | QSR Exclusive Brief

Trump Nominates CKE CEO Puzder to Be Labor Secretary

Andy Puzder is CEO of CKE, which now owns or franchises more than 3,250 restaurants in the U.S. and 26 other countries. CKE Restaurants
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President-elect Donald Trump announced Thursday his intent to nominate CKE Restaurants CEO Andy Puzder as labor secretary.

Puzder, both an adviser and contributor to Trump’s campaign, has been outspoken about cutting back on government regulations like mandating large minimum wage increases and the Affordable Care Act, which he says created a “government-mandated restaurant recession” through increased labor costs for businesses as well as premiums reducing consumers’ discretionary income.

CKE, the parent company of Carl’s Jr. and Hardee’s, named Puzder executive vice president and general counsel in 1997, after Puzder met Carl’s Jr. founder Carl Karcher and became his personal attorney to help him overcome financial difficulties.

In a statement released Thursday, Trump said, “Andy Puzder has created and boosted the careers of thousands of Americans, and his extensive record fighting for workers makes him the ideal candidate to lead the Department of Labor. 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.”

CKE now owns or franchises more than 3,250 restaurants in the U.S. and 26 other countries, generates $1.3 billion in annual revenue, and, with franchisees, employs more than 70,000 people here stateside.

“I am honored to be nominated by President-elect Trump for Secretary of Labor. I look forward to the opportunity to help President-elect Trump restore America’s global economic leadership,” Puzder said in a statement. “The President-elect believes, as do I, that the right government policies can result in more jobs and better wages for the American worker. I’m proud to be offered the chance to serve in his Administration.”

In 2011, Puzder contributed to Mitt Romney’s plan for jobs and economic growth, and served as an economic adviser for Romney’s campaign for president.

The National Restaurant Association praised the decision. “We are excited about President-elect Trump’s announcement that Andy Puzder will serve as our nation’s next Secretary of Labor," Dawn Sweeney, president and CEO of the organization, said in a statement. "As an active member of the National Restaurant Association, Andy brings much-needed business experience to the Department of Labor. He has a proven track record of turning around businesses, and his background in the restaurant industry will help foster an environment for job creation. The restaurant industry is the second largest private sector employer in the country, employing more than 14 million people and producing more than $780 billion in sales annually. It is encouraging someone who has worked in the industry and understands its vast benefits to the American economy as well as the challenges it currently faces will serve in one of the highest posts in the Administration.”

CKE Restaurants issued a statement, saying the organization will continue to grow as planned if Puzder is confirmed for the role.

"CKE Restaurants Holdings, Inc., congratulates CEO Andy Puzder for his nomination to serve our nation as Secretary of Labor," the statement read. "Mr. Puzder would provide excellent leadership for our nation’s business community and all Americans who work hard each and every day to make a better life for themselves and their families. Andy has led CKE for the past sixteen years and during that time has transformed the company into an internationally prominent and growing business, creating and preserving thousands of jobs in the process. As someone who runs two of the nation’s most popular restaurant franchises, Carl’s Jr. and Hardee’s, Andy has distinguished himself as a tireless advocate for economic policies that create jobs and opportunities. Upon Andy’s confirmation, CKE's management team will ensure a seamless and orderly transition, continued corporate growth and a very successful future for the company."

The potential nomination has drawn concern from worker advocacy groups, like the National Employment Law Project (NELP), which champions rights of lower-wage workers.

“The job of the labor secretary is not to strengthen the power of corporations to reap record profits by squeezing every last drop out of their low-wage workforce—and threatening to replace them with machines if they ask for wages they can support their families on,” says Christine Owens, NELP executive director, in a statement. “While Mr. Puzder’s qualifications may fit the bill for the latter, those qualifications are anathema to what a secretary of labor should stand for.”

David Levine, CEO of the American Sustainable Business Council, says in a statement that the Department of Labor should “continue pushing for the highest workplace standards instead of setting the bar at the lowest common denominator.”

"With Mr. Puzder's nomination, Mr. Trump is choosing the wrong model for helping the working and middle classes—and businesses that depend on healthy consumer demand," Levine says.

In the position of labor secretary, Puzder would have the opportunity to advocate for rolling back some regulations or could choose to enforce them less rigorously.

The overtime pay rule, which was put on hold after it was poised to take effect December 1, could face a challenge from Trump and his Labor Department.

According to the Wall Street Journal, Trump hasn’t commented specifically on the regulation but has said he would roll back business regulations he thinks harms the economy.

In an opinion piece published by Forbes, Puzder writes the potential overtime rule will cause business owners and operators to offset increased labor expenses by cutting costs elsewhere, such as reducing employee opportunities, bonuses, benefits, perks, and promotions.

“For most businesses it will be just another added regulatory cost they must look to offset,” he writes. “For their employees, it will be another barrier to the middle class rather than a springboard. One can only wonder when the advocates of progressive economics will realize that, despite their best efforts, you cannot regulate your way to economic prosperity.”

In a CNBC piece co-written with former Nucor CEO Dan DiMicco, Puzder writes that Trump would “incentivize both small and large business growth by lowering the corporate tax rate, encouraging businesses to invest in America, and to bring their foreign earnings to the U.S.”

“[Trump] has promised to reduce the growth-destroying regulatory burdens American businesses must bear, including the repeal and replacement of the [Affordable Care Act],” he writes. “He would keep our energy dollars and jobs in the U.S. by an ‘all-of-the-above’ energy policy. He would renegotiate every bad Clinton trade deal and negotiate equitable new ones. Trump would also crack down on the mercantilist trade cheaters, thereby bringing jobs and industries back to America and reducing our massive trade deficits.”

By Alex Dixon