Fast-Food Chain Once Run by Trump’s Failed Labor Pick Fined for Stealing Workers’ Wages

Los Angeles is going after the chain formerly headed by one-time Labor Department secretary pick Andrew Puzder, who was ousted from his CEO post in March.

Although Trump trumpeted Puzder's “extensive record fighting for workers," employees of the fast-food chain described an environment where cost-cutting pressure made workplace violations the norm. Frederic J. Brown/AFP/Getty Images

Los Angeles is going after the fast-food chain once headed by Andrew Puzder, President Trump’s former pick to run the U.S. Department of Labor, accusing Carl’s Jr. of repeatedly failing to pay dozens of workers the minimum wage.

Los Angeles’ city attorney last week ordered Carl’s Jr. to pay $1.45 million in restitution and penalties after an investigation found the fast-food chain failed to pay 37 workers the city’s minimum wage of $10.50 an hour.

“This is a major corporation that should know the rules,” City Attorney Mike Feuer said in a statement.”L.A. law is clear: employees must be paid at least the minimum wage. Anything less is a slap in the face to workers struggling to make ends meet.”

Los Angeles is the nation’s wage theft capital, according to the UCLA Labor Center. Eight in ten Los Angeles workers have seen their pay shortchanged, according to a Labor Center analysis of wage claim data. Minimum-wage violations cost California workers nearly $2 billion in annual earnings, according to a report released in May by the Economic Policy Institute. California workers lose 22 percent of their earnings, or about about $3,300 annually, from employers who fail to pay the minimum wage.

The city has ordered the fast-food chain to pay $910,010 in penalties to the 37 employees by July 24, and is demanding an additional $541,423 for minimum wage violations, for failing to post the required notice, and for denying investigators access to interview workers.  

Allegations of wage theft are not new at CKE Restaurants, which owns Hardee’s and Carl’s Jr. restaurants. In January, workers at Hardee’s and Carl’s Jr. franchises filed 33 complaints alleging wage theft, harassment, and intimidation at the fast-food chain. CKE spent $20 million over eight years to settle class-action lawsuits in California related to overtime pay violations, as the Orange County Register reported.

CKE Restaurants in a statement to the NPR affiliate KPCC blamed the wage theft allegations in Los Angeles on “an inadvertent payroll error.” It said the company was willing to pay a “reasonable” fine, but called the city’s penalty “excessive.”

From the get-go, Puzder was a controversial pick to head the Labor Department, which enforces workplace laws for roughly 125 million workers. An opponent of the minimum wage and a fan of workplace automation, Puzder’s nomination was sunk by numerous allegations of wrongdoing at CKE Restaurants and its franchises.

Although Trump trumpeted Puzder’s “extensive record fighting for workers,” employees of the fast-food chain described an environment where cost-cutting pressure made workplace violations the norm. Workers at CKE claimed they were denied breaks, exposed to unsafe work conditions and harassment, made to prepare meals while they were ill, and forced to work off the clock to meet the chain’s strict budget goals, according to a scathing report released by Democratic Sens. Patty Murray (WA) and Elizabeth Warren (MA). 

Puzder was ousted from the top job at CKE in March.