The Exit of Trump’s Labor Secretary Pick Has Disappointed These Industry Execs

February 16, 2017, 8:13 AM UTC

Fast food’s hopes for representation in President Donald Trump’s cabinet have been at least temporarily dashed, a major setback for an industry that has felt under siege in recent years.

Andrew Puzder, CEO of the company that owns Carl’s Jr. and Hardee’s, on Wednesday withdrew his nomination to head the Labor Department, which is charged with protecting workers’ rights and welfare. A significant factor was a lack of support from some Senate Republicans, in part over taxes he only recently paid on a former housekeeper not authorized to work in the United States.

Labor groups and advocates criticized Puzder’s comments about replacing workers with robots and his opposition to significant wage hikes, but industry executives and fast food franchisees saw him as a figure who would champion their interests in the government.

“I don’t necessarily know that we’ve been heard,” said Cicely Simpson, executive vice president of the National Restaurant Association, a trade group that had strongly backed Puzder’s nomination.

Puzder had said that businesses were suffering under President Barack Obama’s administration, citing the health care overhaul that required employers to offer insurance coverage for full-time workers. Another change Puzder criticized would have expanded the number of employees eligible for overtime pay — a change that has since been blocked by a federal judge.

Since late 2012, the Fight for $15 campaign has also targeted companies like McDonald’s and Wendy’s, galvanized support for minimum wage increases around the country and pushed for changes that were seen as potentially paving the way for fast food workers to unionize. Although the wage increases many restaurant operators have dealt with were enacted at the state or local level, Obama’s Labor Secretary’s Tom Perez had been a high-profile supporter of Fight for $15.

Trump’s tapping of Puzder in December to head the Labor Department seemed to mark a shift, and the industry enthusiastically supported him. That included pushing back against a coalition of labor groups including the Fight for $15, which sprang into action to oppose Puzder’s nomination with protests at Carl’s Jr. and Hardee’s stores and a social media campaign.

Kendall Fells, national organizing director for the Fight for $15, said the social media push was successful enough that Puzder’s Twitter account blocked multiple coalition supporters.

Judy Conti, federal advocacy coordinator for the pro-labor National Employment Law Project, said the restaurant industry has a high rate of labor violations, and could benefit enormously if the Labor Department were to ease up on enforcements. She said the public pressure that helped prompt Puzder’s withdrawal sent an important message to workers.

George Thompson, Puzder’s spokesman, said his boss was a victim of “an unprecedented smear campaign.” White House spokesman Sean Spicer said he had no information on any possible replacement nominee. The National Restaurant Association said it hoped Trump’s replacement nominee would have experience creating jobs.

Troi Wierdsma, a franchisee with 180 Carl’s Jr. locations in California, had said in December that she was sleeping better with Puzder’s nomination. She cited the changes under the Obama administration, such as requirement for employers to provide health care to full-time workers. Puzder has said that had prompted restaurants to cut workers’ hours, forcing them to get second jobs.

Arby’s CEO Paul Brown noted in an interview last month that minimum wages are mostly decided at a local level, but that Puzder’s appointment could mean the restaurant industry wouldn’t see significant new regulations for some time. Brown said that could give franchisees and others a chance to figure out how to adjust to the ones passed in recent years.

“One of the challenges for the past several years is that things were happening so fast,” Brown said.

Nigel Travis, CEO of the company that owns Dunkin’ Donuts, also said that many of the issues franchisees are facing happen at the local level, but that owners nevertheless have felt frustrated by regulations in recent years.

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