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Reactions Mixed to DOL Pick

Employment-law experts say the President-elect's nominee for Secretary of Labor, Andy Puzder, brings firsthand knowledge of workplace issues and realities to the job, but critics disagree.

Friday, December 9, 2016
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Racy ad campaigns and controversial gender-related comments aside, legal experts who represent employers are applauding President-elect Donald Trump's choice of fast-food honcho Andy Puzder as the next U.S. Secretary of Labor.

Puzder, who has been CEO for 16 years at CKE, the company that operates burger chains Carl's Jr. and Hardee's, is on record as being no fan of the minimum-wage "Fight for 15," Obamacare, the Department of Labor's overtime rule or, most of all, what he and many legal experts see as the overregulation employers have faced during the eight years of the Obama administration.

For some legal experts who represent employers, Puzder's experience and mind-set can only bring positive economic outcomes and stronger workplaces in the coming months and years, for both employers and employees.

"Andy's an excellent choice," says San Francisco-based Michael Lotito, a shareholder at Littler Mendelson and co-chair of its Workplace Policy Institute. "He is an individual who saved jobs when Hardee's was about to go bankrupt. Andy has also created jobs, but even more importantly, he has created opportunities for people." Lotito notes that the vast majority of workers rising through the CKE ranks started as crew members, including the current COO.

"He gives his employees a chance to fulfill what they can be, including women and minorities," Lotito says. "Diversity within his company is stellar. He's not just about providing entry level wages. He's not for the ‘Fight for 15,' he's for ‘fight for $50,000' a year in salary, meaning he wants his employees to participate in a robust way."

Lotito -- who served as co-author of a report by the Coalition for a Democratic Workplace that found the National Labor Relations Board under the Obama administration had "slashed over 4,500 years of legal precedent" -- notes that, from an enforcement standpoint, companies that violate the law still will be held accountable under the DOL; the real sea change will come from what he believes is the overregulation of the workplace under the current administration.

"Those regulations are impeding opportunities," Lotito says, adding that, rather than "going back to the 1920s" regarding compliance (what Lotito calls http://www.hreonline.com/images/DOLlogoL.jpg"crazy talk"), what employers will see is a change in the direction of misguided regulations.

"Andy runs his companies with compliance in mind; he's a highly ethical man," he adds. "I don't believe there should be any sense of relaxation on compliance for employers. But I do expect more sensitivity to a regulatory environment that impedes job creation, for both large and small businesses, so they can be everything they can be."

Scott Witlin of Barnes & Thornburg says Puzder looks to fit the mold of what the President-elect campaigned on: He is an experienced business person who understands the consequences of regulation on business and employment growth. 

"His comments about minimum-wage legislation shows that he is non-ideological and will approach issues pragmatically with an eye toward the real-world impact on business and employment," Witlin says.

Lawrence Lorber, senior counsel in Seyfarth Shaw's Washington office, echoes the idea that the Puzder selection's primary influence on business will fall into the pro-deregulation category.

"Businesses should expect to see the Labor Department focus on its past regulatory activities and engage in efforts to revisit the recent activities," Lorber says. "This also includes new OSHA mandates in the record-keeping area, the new fiduciary disclosure rules under ERISA and certainly a review of the Labor Department's role in immigration decisions."

Lorber says Puzder is a lawyer by training, and that background means he would be especially receptive to the impact of regulations on small business. "He . . . is aware of the FLSA developments, but these aforementioned areas within the jurisdiction of the Department of Labor will certainly demand his attention and that of the other appointees at the Department of Labor," Lorber says.

Naturally, there are opposing voices to Trump's Puzder pick, including U.S. Sen. Charles Schumer, D-New York.

"Turning the Labor Department over to someone who opposes an increase in the minimum wage, opposes the overtime rule that would raise middle-class wages, and whose businesses have repeatedly violated labor laws might be the surest sign yet that the next cabinet will be looking out for the billionaires and special interests, instead of America's working class," Schumer said in a statement.

Debra Ness, president of the National Partnership for Women and Families, described the choice as "appalling." Puzder, Ness said in a statement, is "a stunning and unwelcome departure from the dedicated and powerful champions who have held that post in recent years, and who have helped advance policies like fair pay, paid sick days and paid family and medical leave that are critical to the well-being of workers and families, businesses and our economy."

In the past decade, Puzder's company has come under fire for its highly charged, sexually suggestive advertising, primarily a decade-long campaign that originally featured Paris Hilton eating a Carl's Junior burger in 2005 while washing a car, bookended by a 2015 Super Bowl ad starring model Charlotte McKinney, in which she provocatively walks through an outdoor market naked (not really, as there was camera trickery at work) and chomps on a Carl's Jr. burger.

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In a 2015 interview, Puzder told Entrepreneur magazine that "I like our ads. I like beautiful women eating burgers in bikinis. I think it's very American. I used to hear [that] brands take on the personality of the CEO. And I rarely thought that was true, but I think this one, in this case, it kind of did take on my personality."

On the legal side, the Huffington Post reported that, according to its review of Labor Department records, CKE subsidiary Hardee's Food Systems Inc. agreed to pay $58,000 in back pay to a group of 456 workers after a wage-and-hour investigation by the agency in 2006 and 2007. At the time, Puzder was head of CKE (he became CEO in 2000), which fully controlled Hardee's Food Systems, Huffington Post reported. In fairness, most DOL wage-and-hour enforcement activity focuses on franchisees and not necessarily parent companies.

Those concerns notwithstanding, Mike Aitken, vice president of government affairs at the Alexandria, Va.-based Society for Human Resource Management, says Puzder has the practical experience to know -- or, at the very least, have a strong feeling about -- what actually happens in the workplace, both from employer and employee perspectives.

"From our perspective, we look forward to working with Andy Puzder to create a 21st-century workplace, one that is innovative, fair and competitive," Aitken says. "That will be the litmus test we will be working with, both with the new administration and Congress."

Aitken says there undoubtedly will be -- just as there were with current Secretary of Labor Tom Perez -- issues SHRM will agree and disagree with coming from the new Secretary and Labor Dept., pending confirmation.

"No one knows the impact of Department of Labor initiatives better than HR," Aitken says. "As the professionals who work every day to create workplaces with an engaged and productive workforce, HR understands how government policies affect employers and employees alike."

He adds that SHRM -- a key HR advocate and member organization -- will continue to offer HR's important perspective as Puzder's nomination moves toward confirmation and the Trump administration takes up workplace issues.

"There are significant issues ahead, and our job is to try and help promote the most effective workplace policy possible," Aitken says, pointing to the organization's Principles for a 21st Century Workplace, which highlight the HR public policies that SHRM hopes to work on with the Trump administration and the 115th Congress.

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