Employees Allege Wage Theft and Sexual Harassment by Trump's Potential Secretary of Labor's Restaurants

Business Features Andy Puzder
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Employees Allege Wage Theft and Sexual Harassment by Trump's Potential Secretary of Labor's Restaurants

Darius Cephas, a McDonald’s worker in Boston who spoke to a rally of 50 people outside the Department of Labor.

BOSTON—Activist groups around the country held a national day of action to protest the pending confirmation of Andrew Puzder to the office of Department of Labor. The CEO of CKE Restaurant group was appointed by President-elect Donald Trump in December.

Puzder has been an advisor to Trump and a donor during his presidential campaign, and he could soon be running the powerful department that oversees occupational safety, wage and hour standards, unemployment benefits, and economic statistics. CKE franchises, licensees, and operates fast-food chains, including Carl’s Jr. and Hardee’s. Puzder is a member of the National Restaurant Association (NRA), a trade organization of food industry businesses. According to a 2011 SEC filing, Puzder collected over $10 million in total compensation in 2010. SEC filings also show that CKE Restaurant group has 43 owned or franchised locations operating in 42 states and 25 foreign countries.

Puzder’s vocal opposition to a $15 minimum wage and general pay increases has raised red flags for unions and working class coalition groups, who are concerned about stories of wage theft and mistreatment of employees of Carl’s Jr. and Hardee’s. Their fodder? Three class action lawsuits against the company regarding overtime payment to employees settled in 2004 with CKE for $9 million, and a new report.

The report is based on a survey of 564 CKE employees, which was released by the coalition group Restaurant Opportunity Center (ROC United) this week. Two-thirds of female employees surveyed alleged sexual harassment at work, with one-third of all surveyed claiming wage theft.

The survey was conducted over two weeks until Jan. 7, with the organization seeking responses to 45-questions about wages and working conditions via social media. Workers were from Carl’s Jr, Hardee’s Red Burrito, and Green Burrito. More than three quarters of those surveyed were women.

Occupational incidences mentioned include 79 percent of employees working while sick, and 31 percent claiming to have gotten injured or ill on the job, citing grease fires and lack of protective equipment. Puzder is strongly opposed to the Affordable Care Act and mandatory sick leave policies.

Alleged labor code violations include having to work after clocking out, and not receiving required breaks. In the report, it is alleged that survey workers do not receive a 30-minute meal break for every five hours worked, and 45 percent don’t receive a ten-minute rest break for each four-hour period worked.

One worker, Ashlee Sutphin, was a shift leader at Hardee’s in Puzder’s home state of Tennessee. She recently quit to work as a housekeeper for twice her hourly wage of $7.50/hr, and said that employees even worked with pneumonia. Sutphin also alleged that she went unpaid for doing multiple jobs in addition to the role she was employed in. She explained, “On top of the company underpaying us, we were continually pressured to clock out early. Management was always looking to cut labor costs every way possible, making it impossible to make a living while working there.” Her final paycheck was for less than $300, although her hours should have reflected more. Sutphin alleges a manager got a bonus at her local Hardee’s for keeping labor costs low and docking holiday pay.

Workers from Carl’s Jr. and Hardee’s spoke about widespread wage theft, lack of health insurance, and harassment at CKE restaurants during an event hosted by Senators Elizabeth Warren and Patty Murray this week. Warren tweeted:

Puzder has been a proponent of automation in the restaurant industry, mentioning his visit to Eatsa, the first fully automated restaurant in the U.S., in an interview with Business Insider.

“They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case,” said Puzder. He mentioned being in favor of applying the new tech model to his own company.

The International Franchise Association, a membership organization of franchisors, franchisees, and suppliers, has blasted the report and its findings. Senior Vice President of Public Affairs Matt Haller told Paste in a statement, “It is unfortunate to see unions spending more of their members' hard-earned money in a deliberate smear campaign.” The organization's public affairs office forwarded results of a survey released by conservative non-profit think tank Employment Policies Institute.

Percentage of CKE Employees who agree with the following statements:
I have learned valuable, marketable job market skills working here. – 90%
I feel safe and respected in this working environment. – 92%
Carl's Jr./Hardee's provides…an opportunity to move up in the workplace. – 90%
Carl's Jr./Hardee's is a great place to work. – 92%
I have the opportunity to work as many hours as I'd like. – 73%
I admire the store management and the management of the company. – 90%

Although unions like Service Employees International Union (SEIU) were present at local rallies, ROC United itself is not a union, but a nonprofit created post-September 11, 2011 for displaced restaurant workers which then grew to an association of workers and employers.

Sian Lewis, a spokeswoman for ROC, told Paste, “Puzder considers protecting workers' rights to be an unnecessary intrusion on business freedom, and prizes his bottom line as a restaurant executive over the welfare of America's workers—the very people he would be tasked with protecting as Secretary of Labor.”

As the anti-Puzder sentiment grows among Democrats, conservative groups and politicians have taken to social media to support the appointee. Former Republican House Majority Leader Eric Cantor is one of them.

Jeremy Adler of America Rising Squared, a conservative civic organization, tweeted his support of Puzder, and told Paste, “It’s shameful to see Big Labor use their hard-working members’ dues to orchestrate protests aimed at besmirching the character of a great American businessman, Andy Puzder.” The group is actively working to get Puzder confirmed as Labor Secretary.

Puzder’s confirmation is not without other issues. A petition for damages obtained by Politico confirms that the ex-wife of Puzder, Lisa Feirstein, accused him of domestic battery in the 1980s, before their separation and divorce. Feirstein later retracted her claims, but a new story on Politico includes confirmed reports from spokesmen that Feirstein also anonymously appeared on the Oprah Winfrey show in disguise as a victim of domestic abuse. Puzder has always denied the allegations. An email between the two from after the election was disclosed to Politico by Puzder in which Feirstein apologizes for the allegations, and wishes him well in the Trump administration.

UPDATE—Senator Warren and a group of Democratic senators have asked the Labor Department to fulfill FOIA Request of Trump Nominee Labor Violations. Their statement is as follows:

Dear Secretary Perez and Administrator Weil,

We write regarding a Freedom of Information Act (FOIA) request from the Center for American Progress (CAP) that you received on December 20th, 2016.(1) We understand that they requested records related to any information on investigations conducted by the Department of Labor into the companies owned by nominees to President-elect Trump’s cabinet.

The information that CAP has requested will help us to fulfill our Constitutional duty to advise and consent on the officers the President appoints.(2) In accordance with this responsibility, it is incumbent upon us to review any information that may be relevant to the experiences, qualifications, and suitability of the nominees to serve in the position to which they have been nominated.

Information regarding investigations by the Department of Labor into wage and hour violations, violations of health and safety laws, and any other violations of labor laws enforced by the Department of Labor into companies owned, chaired, or substantially managed by cabinet nominees is relevant to our ability to assess their suitability for these roles.

We are eager to review any information related to past or ongoing investigations by the Department of Labor, including all of its enforcement agencies, both federal and regional, on any of the below companies, and their subsidiaries or franchises. The companies should include, but are not limited to:

WL Ross & Company, Wilbur Ross
· ExxonMobil, Rex Tillerson
· World Wrestling Entertainment, Linda McMahon
· Virtu Financial, National Hockey League, Vincent Viola
· OneWest Bank, CIT Group Inc., Steve Mnuchin
· Energy Transfer Partners, LP, Rick Perry
· Windquest Group, Betsy DeVos
· CKE Restaurants, Inc., Andrew Puzder (emphasis added)
· Vaccinogen, Inc., Dr. Ben Carson(3)

Given that this information may influence our willingness to advance theses nominations, we ask you to fulfil CAP’s request as expeditiously as possible. Senate Committees have scheduled hearings on these nominations beginning as early as next week.

Sarah Betancourt is a Massachusetts-based journalist who writes about health, public policy, business, and environment. Follow her on Twitter.