President Donald Trump’s pick to be the next labor secretary, Andrew Puzder, has “serious conflicts of interest” due to his work for an industry lobby that sued to stop overtime reforms, Senate Democrats said Thursday.
In a letter sent to the nominee and obtained by The Huffington Post, Sen. Patty Murray (D-Wash.) told Puzder that the committee overseeing his nomination still had not received his ethics paperwork, and that she expected a “detailed account” of what steps he’d take to avoid conflicts related to overtime regulation.
“If you are confirmed,” wrote Murray, ranking member of the Senate Committee on Health, Education, Labor and Pensions, “your participation in any decisions, meetings, or conversations regarding the overtime litigation may put you in violation of legal ethics restrictions and prohibitions against conflicts of interest, raising questions about your ability to manage a key part of the responsibilities of the Secretary of Labor.”
Puzder is the chief executive of CKE Restaurants, which owns the Hardee’s and Carl’s Jr. burger chains. Until recently, he served on the board of the International Franchise Association, an industry group that has opposed workplace regulations pursued by the Obama administration. After former President Barack Obama reformed overtime rules to make them more generous to workers, the IFA joined other groups in suing to stop those rules from going into effect. So far, they have been successful.
According to the IFA, Puzder stepped down from the board earlier this month, weeks after Trump nominated him to be the next labor secretary. According to the most recent tax filings available, Puzder’s work for the nonprofit was unpaid.
Nothing about having served on IFA’s board should forbid Puzder from becoming labor secretary. But having been a board member of a lobby that sued to stop the overtime changes, Puzder showed a vested interest in whether the reforms survive, said Jordan Libowitz, a spokesman for Citizens for Responsibility and Ethics in Washington, a nonprofit ethics watchdog.
CREW believes that, if Puzder is confirmed, he should recuse himself from any work on the overtime issue for the duration of the lawsuit. Under the letter of the law, Libowitz said, the recusal should last a year from his board resignation; but under the spirit of the law, it should last as long as the matter is in the courts, he argued.
“He was on the board and had a duty to the board to represent their interests,” Libowitz said. “You have to wonder whose interests is he representing. If he really wants to be clear here, he should recuse himself for the entire lifetime of the litigation. Things can take a long time in the courts.”
The IFA does not agree there could be a conflict.
“This is laughable and complete hyperbole by the Democrats trying to further muddy the waters and delay the process,” said Matt Haller, a spokesman for the group.
Puzder’s nomination hearing has been pushed back several times, but the holdup doesn’t appear to be the fault of Democrats. Murray’s office says they still have not received paperwork on Puzder’s potential conflicts from the Office of Government Ethics, and Republicans, who hold the majority and set the Senate’s calendars, have announced numerous delays to Puzder’s hearing. It is now set for Feb. 7; it was originally slated for earlier this month.
Regardless of his work for IFA, Puzder’s stance on the overtime reforms has been clear: He has argued publicly that the new system would force employers to cut jobs.
Under the reforms pursued by the Obama administration, millions more salaried workers would be entitled to time-and-a-half pay when they work more than 40 hours in a week. The changes would have hit the fast-food industry hard, since many restaurant managers work long hours for low salaries, but are currently exempted from overtime pay because they’re classified as managers.
Those are just the kind of workers the Obama administration had in mind when it developed the changes. By entitling more salaried workers to overtime pay, the new system would force employers to either limit their workload to 40 hours or start paying a premium for all the overtime.
The rules were slated to go into effect on Dec. 1, leading employers around the country to start implementing changes. But a federal judge in Texas agreed with the IFA and its allies that the administration overstepped its bounds with the rule, blocking it from going into effect. That ruling is currently on appeal. It will be up to the new Trump administration to defend the rule in court, leaving backers of the reform with little hope it will survive.