Andy Puzder, the fast-food executive whom Donald Trump has nominated to be his labor secretary, is emerging as one of the president-elect’s most controversial Cabinet picks. Labor groups are organizing against Puzder over his positions on the minimum wage, government regulation, automation and other issues. The restaurant industry, meanwhile, is rallying to his defense.
As labor secretary, Puzder would be in charge of enforcing labor laws, including those concerning the minimum wage, and establishing policies that promote the welfare of wage earners and job seekers across the country. He would also oversee the Bureau of Labor Statistics, which produces economic data, including the unemployment rate; the Occupational Safety and Health Administration, which enforces worker safety regulations; and the federal unemployment benefits system.
Puzder’s opponents are trying to make an issue of his record as the CEO of CKE Restaurants, the parent company of the Hardee’s and Carl’s Jr. burger chains. On Tuesday, the Restaurant Opportunities Centers United, an advocacy group for restaurant employees, released a survey of CKE workers, many of whom accused the chain of labor law violations. Two-thirds of women in the survey said they had been sexually harassed on the job.
But another survey released the same day reached the opposite conclusion. That survey, from the industry-backed Employment Policies Institute, found that employees of Hardee’s and Carl’s Jr. franchises were overwhelmingly satisfied with their work environment.
Puzder’s confirmation hearings may help sort out the dueling claims. But those hearings, originally scheduled for next week, have been postponed, possibly until February. In the meantime, here is some of what we know about the surveys and about how Puzder treats his employees:
Both surveys are deeply flawed
Experts say both surveys have their issues.
“In some ways, it’s competing fake news,” said Robert Santos, chief methodologist at the Urban Institute, a Washington think tank that conducts research on public policies. “Both of them are using methods that have clear problems but managed to get an answer that suited their purpose.”
Restaurant Opportunities Centers (ROC), the employee advocacy group, sought out CKE Restaurant workers on social media to participate in their survey. After communicating with almost 900 employees, the organization said it successfully surveyed 564 about working conditions in Hardee’s and Carl’s Jr. restaurants.
The problem with ROC’s approach, Santos said, is that there is no way to effectively determine if respondents are even human beings, let alone actual employees of CKE Restaurants. And even if the employees are real, they are a self-selected group — it is possible and even likely that workers who have experienced problems were more likely to respond to the survey.
Santos said the survey may have some value. The anecdotes reported by employees suggest that CKE may have problems with harassment or other violations. But the survey’s methodology means there is no way to know how widespread those problems are.
The Employment Policies Institute’s survey had different — but significant — problems.
The institute worked with a research firm that gathered over 3,000 employee phone numbers from Hardee’s and Carl’s Jr. franchises across the country. Surveyers conducted 242 phone interviews. (Employees were given the chance to opt out if they didn’t want their phone numbers shared.)
The institute’s survey has one clear advantage over ROC’s: Survey respondents are definitely CKE employees. But it suffers from a similar potential for bias, just in the opposite direction. Workers knew the survey was being conducted in coordination with their employer, and although the researchers promised anonymity, employees may have felt pressure to report positive experiences.
“If you don’t opt-out, then there is pressure on you to participate,” Santos said. “If you feel pressured, then you’re more likely to give the socially acceptable response.”
Both the Employment Policies Institute and ROC defended their surveys. ROC Research Director Teófilo Reyes said the organization made every effort to have its survey be as rigorous as possible and looked specifically to reach out to users on social media who identified as Carl’s Jr. and Hardee’s employees. Michael Saltsman, research director at the Employment Policies Institute, said that to remove any kind of pressure, the surveyors emphasized to respondents that their answers would not be shared with their employers.
Both CKE and Trump’s transition team criticized the ROC study, which CKE described in an email as “a politically motivated attack.” But ROC’s Reyes said the survey findings were unsurprising given Puzder’s public position on the minimum wage and other issues.
CKE has a history of violating wage laws
Government records indicate that CKE and its restaurants have gotten into trouble with the Department of Labor in the past. But it isn’t clear how widespread those violations are or how CKE compares to other companies in the industry.
In a case that concluded in 2007, CKE Restaurants paid out $58,001 in back wages to 456 employers after a Department of Labor investigation found overtime violations at corporate-owned stores. And according to records provided by the Department of Labor, since 2010, individual Hardee’s and Carl’s Jr. franchisees — which operate under a license from CKE but aren’t owned by the company — have been a part of several other investigations. Those investigations have involved almost 300 employees and have led franchisees to pay $59,394 in back wages for various violations.
Wage violations are relatively common in the fast-food industry. In the 2016 fiscal year, the Labor Department’s enforcement division found more than $5.4 million in back wages due for 10,300 employees in the fast-food industry. According to the Labor Department, violations common in low-wage sectors such as fast-food restaurants typically consist of failure to pay overtime and failure to pay the full minimum wage for all hours worked.
A sexual harassment problem?
The Equal Employment Opportunity Commission has settled at least 10 sexual harassment cases involving fast-food establishments since 2010, according to my own analysis of federal court records. Those cases have resulted in about $2 million in total settlement damages. None of those cases involved Hardee’s or Carl’s Jr.
Those figures, however, don’t include any cases that the EEOC negotiated privately or lawsuits filed in state or local court systems. They also exclude settlements reached via private arbitration — potentially a large share of cases because many companies require employees to agree to adjudicate disputes via arbitration.
A survey released in October suggests that sexual harassment may be a major problem in the fast-food industry. The survey, by Hart Research Associates, found that 40 percent of female fast-food workers experienced unwanted sexual behavior on the job.
Other than the ROC survey, there is little information on how widespread sexual harassment is at CKE restaurants in particular. But the chain has come under fire in the past for its racy television ads, which some groups have criticized as offensive, saying that they objectify women. Puzder has defended those ads.
Puzder’s positions are unpopular with labor groups
Unlike many of Trump’s Cabinet nominees, Puzder has a long history of public comments on the issues he would deal with as labor secretary. He is an outspoken critic of raising the minimum wage, which he has said would result in job losses particularly at small and midsize businesses. (Economists disagree about the effect of minimum-wage increases on jobs, but most research has found that modest increases lead to at most a small drop in total employment.)
Puzder has said that instead of a giving the federal wage floor a big boost, the government should allow states and localities to adjust the minimum wage based on their regional economic environment. That’s already happening in many parts of the country.
Puzder has also called for repealing the Affordable Care Act, which he said created a “government-mandated restaurant recession” because rising premiums left consumers with less money to spend eating out. There isn’t much evidence for that claim, however. The restaurant industry has added nearly 1 million jobs since Obamacare’s individual mandate took effect, and restaurant spending has continued to rise (though growth has slowed in 2016).
Puzder has said that rising labor costs and government regulation are leading restaurants to turn to automation, replacing employees with technology. But he has also drawn the ire of labor groups for implying automated workers are superior for reasons beyond cost.
“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,” Puzder told Business Insider last year.
CORRECTION (Jan. 13, 3:01 p.m.): An earlier version of this story incorrectly described who provided employee information for the Employment Policies Institute’s study on working conditions at Carl’s Jr. and Hardee’s restaurants. A third-party research firm hired by the institute worked with CKE franchisees to get the information, not with the chains’ corporate parent.