ELIZABETH WARREN i?.i 't t- rift-E. ELI-pat; 'n .Jr'iffl ,1-22: I ll" .25 Tll?tln M.) rower?s I, .- . rlO?m I. .. .. ?ll-MD NATURAL HLBUUHCE $137.7.? i "fill-JIM": M7 Ti- i? 0N 31. Kiri l_l I. l?u'?t I- February 13, 201? Andrew Puzder CEO CKE Restaurants 6307 Carpinteria Avenue, Suite A Carpinteria, CA 93013 Dear Mr. Puzder, On December 2016, President Trump nominated you to serve as Secretary of the Department of Labor (?Labor Secretary?) in his Administration' On February 16, 2017, you are scheduled to appear before the US Senate Committee on Health, Education, Labor, and Pensions Committee") for a confirmation hearing that will precede a vote on your nomination.2 As a member of the HELP Committee, I will attend this continuation hearing to ask you questions that will help me determine whether you are quali?ed to ful?ll the Department of Labor?s mission to "foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States.?3 If you are con?rmed, you will be responsible for overseeing and enforcing labor laws that guarantee a minimum wage and establish a forty-hour work week, and federal health and safety laws that ensure that workers are safe on thejob.4 150 million American workers and their families will depend on you for their economic security, their safety, and their livelihoods.S My staff?s review of your 16-year tenure as CEO of CKE Restaurants, Inc., the parent company of Hardee?s and Carl?s Jr., reveals that you?ve made your fortune by squeezing the very workers you?d be charged with protecting as LabOr Secretary out of wages and benefits.6 Your company?s record of prolific labor law abuses and discrimination suits?the most of any major burger chain gives me great pause given that as Labor Secretary you?d be charged with ?PresidenbElect Donald J. Trump Notninates Andy Puzder as Secretary ofthe Department of Labor.? The Transition Team. Great (Dec. 8, 2016). Online at: 3 "Nomination of Andrew Puzder to serve as Secretary of Labor.? (online at littormww. help. senate, gown a tnat 3 ?Our Mission," Unttau' States Department ofLabor (online at 4 ?Summary of the Major Laws ofthe Department of Labor." Untted States Department ofLabor. Online at: 5 ?Labor Force Statistics from the Current Population Survey.? Databases. Tables Calculators by Subject. Bureau of Labor Statistics. United States Department ofLabor. Online at: ?Andrew F. Puzder.? Management Team. CKE Restaurants. Online at: enforcing these very laws? Further, the painful ?rst?hand accounts of these abuses by the workers in your company and its franchises that have surfaced since your nomination (including three accounts from workers I heard from in person at a public forum) should sound an alarm for every member of the committee and the Senate.?3 In addition to your role as CEO at CKE, your long record of public comments reveais a sneering contempt for the workers in your stores, and a vehement opposition to the laws you will be charged with enforcing. You?ve referred to your workers as the ?the worst,? (albeit the ?best of the You?ve said you?d replace them with robots because robots . .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 You?ve opposed minimum wage increases that would overwhelmingly bene?t the workers in your stores and you?ve vehemently opposed a DOL overtime rule that would give 4.2 Americans, including the managers in your stores, a $1.5 billion raise in 201? alone.? Given the breadth of the responsibility you will hold to protect workers if you are con?rmed, I have a large number of outstanding questions and concerns I would iike you to address before I vote on your nomination. Unfortunately, despite repeated requests from me and my Democratic colleagues on the committee, and contrary to established committee precedent, the Republican Chairman has only allowed a few minutes for questions in previous continuation hearings this Congress.12 To ensure that the Senate and the public can obtain answers about your readiness for this job and determine whether you are indeed quali?ed for this position, this letter contains my additionai questions. The remainder of this letter details my concerns and asks you a set of questions that will help me to better understand how you would approach the position of Secretary ofLabor. In order for me to have a complete understanding of your views, piease provide me with answers to the foliowing questions no later than February 21, 2017. 7 ?Andy Puzder?s Record of Discrimination Lawsuits.? Capitai if: Main: Investigating Power and Poiitics. Online at: and~sex I 23 3 ?Senators Warren, Murray, Stabenow Host Forum with Workers Mistreated by Puzder." US. Senator Eiizabetn Warren (Jan. 10, 2017). Online at: 350. 9 A. "Trump labor pick in 20l on his fast-food workers: We hire ?the best of?the worst?.? CNNi-iioney (Jan. 23, 2017). Online at: http:itmoncy.cnn.comi20 '9 Taylor, K. ?Fast-food CEO says he?s investing in machines because the govemment is making it difficult to afford employees.? Business insider (Mar. 16, Z?lti). Oniine at: auto mated? locat ion-20 1 6-3. ?Facts on the updated overtime rule." Economic Poiiav institute (May 17, 2916). Online at: "wan-e ?Final Rule: Overtime?Questions and Answers.? United States Department of Labor. Ouline at: l4; ?Overtime Pinai Rule: Summary ofthe Economic impact Study.? United States Department ofLai-Jor. Unline at: naIEti i oioveniliieFinaiRuie.ndf. ?3 Strauss, V. ?How Sen. Lamar Alexander slammed Betsy DeVos?s confinnation hearing through committee.? The Washington Post an. i7, 201?). Online at: shgetr?utp-QUI 'i-"ti calming. CONFLICTS OF INTEREST The next Labor Secretary will be responsible for improving working conditions across the country; providing opportunities for employment to those seeking it; and guaranteeing employment-related rights and bene?ts. That is why our next Labor Secretary must work exclusively for American workers and families. Because of your inextricable ties to the industry that you will be tasked with regulating, I am deeply concerned that you will be unable to work exclusively for the American people. You have spent 16 years as President and CEO of CKE Restaurants, the parent company of several fast food chains that have been repeatedly investigated for violating labor regulations.? You have made millions of dollars in that role, and you have millions more invested in your company. During your time at CKE, DOL investigated dozens of allegations of wage theft, occupational safety hazards, and other potential labor violations at numerous Hardee?s and Carl?s Jr. locations.IS They found violations in almost 60% ofthese cases.?3 It is DOL?sjob to investigate claims of both wage-anduhour law violations and occupational safety hazards.? In fact, the labor secretary is sometimes involved in company-speci?c investigations. While leading CKE, you have stated numerous times your opposition to increasing the minimum wage and paying overtime to your employees.'8 Since 2004, DOL has closed 108 investigations at stores af?liated with CKE, resulting in those stores paying over $150,000 in back wages to nearly 1,000 employees mostly for violations of minimum wage and overtime pay laws. 19 Additionally, you?ve settled for millions of dollars in wage theft and overtime Suits and have several more suits ongoing.? ?3 Ben Penn, ?Burger Executive as Labor ChiefCould Pose Con?ict,? Bloomberg BAH (Dec. 2, 2016) (online at I 444806 if}. Walter Hamilton and Tiffany Hsu, ?Carl?s Jr. and Hardee?s parent company (IKE agrees to buyout,? Los Angeles Times (Feb. 27, 2010) {online at Gibb-27). '5 Jeremy Venook, ?The Trump Administration?s Con?icts of Interest: Scott Pruitt Edition,? The Atlantic Jan. l8, 20 (online at 17ft) crib~sl1ee051271 ll). '5 M. Id. ?l Andy Puzder, ?Wages With Minimal Wiggle Room," The Wall Street Joan-nut (Dec. 28, 20 i 5) (online at ?The Harsh Reality Of Regulating Overtime Pay,? Forbes (online at overtime-paytitSd75ba26232l). 1" St-rprn note 13. 3" Jodi Kantor and Jennifer Medina. ?Workers say Andrew Puzder Is ?Not the One to Protect? Them, but He?s Chosen To.? New York Times (Jan. 15, 2017} {online at: Slusfpolilicsfandrew- You have opposed the expansion of joint employer doctrine, which increases accountability for large corporations when their franchisees break the law.21 CKE Restaurants is the parent company of many fast-food chain locations owned and operated by franchisees.22 While you have reached an agreement with the Of?ce of Government Ethics to disclose and divest all of your conflicts of interest, President Trump has made it abundantly clear that he will not appropriately divest.23 Mr. Trump?s company, like yours, has along record of mistreating workers and violating federal labor iaws.24 President Trump still owns his business.25 President Trump appointed you to run the agency responsible for enforcing the law against his own company, presenting an inextricable con?ict for you. Our next Labor Secretary must hold of}. employers accountable for unfair practices, and i hepe that if con?rmed, you will not put the interests of the man who appointed you above those of the American people. - Based on these facts, I have the following questions on this subject: Wit? you permanentiy reiinqnisn your ownership in stocks reiateo? to CKE Restaurants and permanently give tip your position as President and The Labor Secretary is responsible for enforcing the laws against wage theft and other labor abuses that you have personally fought, and that your company has been fined or penalized for violating dozens of times. Given this history, now can t-vorirers trust you to enforce these Iawsfairiy and aggressiveiy? Hconfirtned, you agree to reettse yottrseif?'otn any and D011 actions onel decisions af?icting CKE rinringyottr entire term as Labor Secretary? Do you believe President Trtonp snottid?tit?y divest ?orn The Tramp Organization in order to prevent con?icts of interest for you and otherfederai government agencies? El Noam Scheiber, ?Trump?s Labor Pick, Andrew Puzdcr, is Critic ot?lv?linimum Wage increases,? The New York Times (Dec. 8, 2016) tooline at Scott T. Allen, Asserts ?As Broad as Possible" .ioint Employer Standard for Wage and Hour Enforcement," Labor at: Employment Law Perspectives (Jan. 25, 20 6) (online at lab orempioymentpersrn ecti ves .comt'ZII} 1 int-employer- staudard- 33 ?Our Story,? CKE Restaurants {online at 33 Andy Sullivan, Emily Stephenson, and Steve Holland, "Trump says won?t divest from his business while president,? Renters (Jan. 1 l, 201?) (online at 4V2 1? See Cogan Schneier, ?Labor board: 'i?rump hotel violated labor law,? Politico (Nov. 3, 21} 6) (onlinc at see oiso Steve Reilly, ?Hundreds allege Donald Trump doesn?t pay his bills," USA Today (online at laswuitsi8529?i?2?i?4t). 35 Supra note I . Will you cainrnit ta eiybree wage and hour regulations against The Tramp Organization iftne company violates these laws and harms its enrpiayees? What is your speci?c pian for insulating yoursetfand DOL??atn con?icts of interest reiatea? to ?3011 actions that may impact the Tramp Organization? ENFORCEMENT AND REGULATION DOL is responsible for implementingand enforcing more than 180 federal laws that have been passed by Congress. These laws include the Fair Labor Standards Act (FLSA), which sets a federal minimum wage and provides overtime protections; the Occupational Safety and Health Act (OSHA), which requires that workplaces are free from safety hazards; the Family and Medical Leave Act (FMLA), which grants workers up to 12 weeks of leave for births or serious illnesses; several laws that require government contractors to pay ?prevailing wages?? and the Employee Retirement Income Security Act (ERIE-A), which. contains various requirements for retirement plans.26 If continued, yourjob will be to ensure that employers follow these Iavvs, whether or not you personally agree with them. I have signi?cant concerns about your commitment to enforcing labor laws based on your public comments and your company?s failure to follow them. Your frequent public comments on labor laws indicate that you take issue with both their existence and their enforcement. During the presidential campaign, you praised President Trump for wanting to ?immediately repeal dozens of President Obama?s antibusiness executive You also expressed disdain fer several important labor regulations, including safety regulations, paid time off, and discrimination protections, when you explained your preference of robots to workers. You said robots ?never take a never a slip-and-fall, or an age, sex, or race discrimination case.?28 Since 1938, the federal minimum wage has protected working families by ensuring that workers are fairly compensated for their time and effort.29 As one of our nation?s most fundamental labor protections, the minimum wage has been periodically raised through the years to keep up with the rising cost of living. But you have criticized any attempt to require employers to pay workers a living wage. Today?s federal minimum wage of $125 is 17% below the poverty line for a family of tour, and an increase to just $10. i 0 per hour would lift at least 4.6 million 3? ?Summary of the Major Laws of the Department of Labor.? United States Department of Labor. Online at: Puzder, A. a. Moore, 8. Trump Economy Beats Clinton?s.? The Wait Street Janrnai (July 14, 2016). Online at: 2* Taylor, K. ?Fast?food CEO says i1_e*s investing in machines because the government is making it dif?cult to afford employees.? Business insider {March I6, 2015}. Online at: automated-location-Z? I 5-3. 39 ?Minimum Wage?US. Department of Labor." United States Department ofLabar. Oniine at: l. people out of poverty.3U Yet you have written that ?some jobs don?t produce enough economic- value to bear the increase" and accused the Obama administration of raising the minimum wage for federal contractors to 0.10 for purely political reasons}l You have also strongly opposed the Obama administration?s Overtime Rule, which would allow all workers making less than $4?,500 per year to receive overtime pay, securing protections for 4.2 million workers.? You decried this policy as ?rewarding time spent rather than time well spent,? adding that ?what [workers] iose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager.? The overtime threshold you were defending defines an overtime-ineligible ?salaried manager? as a worker making just $23,660 per yearwa situation you mocked as ?hardly You defended loopholes that were closed by the Obama Administration during your tenure at CKE. Faced with the fact that FLSA exempts ?bona tide executives? from overtime protections, you went to extreme to de?ne your ordinary line workers as managers, arguing that ?managers may help their employees stock. shelves or perform other ?physical work* white performing their ?primary duty? as a manager??1 1 am concerned that your anti-worker rhetoric is a disturbing sign of how you will enforce labor laws because it is consistent with your own company?s abuse of its workers on a large scale, both by illegally underpaying workers and by putting them in dangerous and unhealthy situations.35 Since your nomination, 1. have heard from dozens of CKE workers about how they have been mistreated by management on thejob.?S Laura McDonald, a general manager at Carl?s Jr. from 1998 to 2012, said that she had repeatedly experienced wage theft by working unpaid overtime and being cailed into work on her vacation days. She said that the company?s policies ?make it impossible to do the job without working off the clock, and she has joined one of severai class action lawsuits against CKE for labor law violations.? Ms. McDonald?s story is not unique. 3? ?Raising the Minimum Wage: A Progress Update.? Executive O?t?ee oftt?ie President (October 2016). Uniine at: wh ite house. govtsitestde fan tti'tlest6_october_20 6_rn in_wage_rep ortpd 3' Puzder, A. ?Minimum Wage, Maximum Politics." The Wait Street Journal (October 5, 2014). Online at: '12 ?The Overtime Rule." United States Department of Labor. '13 Cite to ?hardly oppressive? 3?4 Puzder, A. ?Obama?s Overtime-Pay Boomerang.? The Watt Street Journal (March 25, 2014). Online at: 16987342 16. 35 Penn, B. ?is Franchise Model a Recipe for Fast?Food Wage Violations?? Biootaberg RNA {September 14, 2016}. Online at: Jamieson, D. ?Donaid Trump?s Labor Pick Should Know Worker Safety Laws. His Company?s Been Fined For Breaking Them.? The Hu??ittgton Post (December 12, 2016). Online at: safety_us_584fi T09e4b04c3e2bb 494?. 3? ?Charbrioled: Workers tell all about life under Puzder.? A HELP committee Minority Staff Report. Online at: 3? McDonald, L. ?Senate Democrats Forum with Workers Mistreated by Puzder" [Youtnbe video]. Senate (January 10, 2017). Online at: 6 Your public comments and your company?s treatment of workers call into question your suitability for a position in which you will be reapernsible for enforcement of federal labor law. To address these concerns, please provide answers to the following questions: How do you explain your company ?s numerous offederai labor iaws? What did you mean when you referred to your workers as the "besr ofi'i'ie worst? Do you still believe inai ii is preferable in replace CKEs workers with robots? Do you heiieve the some is true rfempioyees and workers in other businesses and industries? Wiil you coininii to continuing enforcement wage and hour and workpiece safety standards? What ineirics wiil you use to assess the ejj?ieciiveness ofyour eiy?orcenieni e?oris? Wiil you to advocating for the maintenance of currenifunciing letters for the Wage and Hour Division, ihe Occupationai Safer and Health Adininisiraiion, anal other divisions of 13012 that are crucial to enforcingfecierai labor law? You have, in your puhiic comments, been argue? ofriie DOL Overtime Ruie. you to defending in couri and enforcing Overtime Rule, which i-vouia' exienci proieciionsfor ofA nierican workers? Knot?, what are your speci?c plans for updating so that only oonafia?e executives, rather than iow-incorne workers, are exempt??oni overiinie protections. as fire FLSA requires? What you do to improve (he and enforcemeni offecierai labor iaw and ensure that all American workers can work in a score and healthy environment, achieve?nanciai security. and retire in aid age? WELLS FARGO, RESTAURANT ASSOCIATES, AND OTHER ONGOING INVESTIGATIONS The Obama administration collected nearly $1.6 billion in back wages for more than 1.7 million American workers between 2009 and 2016.38 Because of robust DOL Wage and Hour Division enforcement of wage and hour laws, these hardworking Americans were ?nally paid the wages they were owed for their work. During my time in the Senate, I have joined my colleagues to initiate two major wage and hour investigations. The ?rst investigation involved Restaurant Associates, the company that holds the federal contract for the United States Senate Cafeteria. 33 Seretary Thomas E. Perez. ?Department of Labor: Memorandum to the American People? Online at: 7 In the summer of2015, a series of reports featured United States Senate Caleteria workers that were living below the poverty line, in part because they were not being paid the wages they were owed.? After speaking with a number of these workers in my of?ce, and consulting the Architect of the Capital, I joined the entire Democratic caucus in sending a letter to DOL, asking them to investigate these alleged wage and hour violations by Restaurant Associates in the Senate cafeteria, and in their other contracts throughout the federal government.? On July 2106, DOL found that Restaurant Associates owed more than ?all million in back wages to 674 employees for violations ofthe McNamaraO?l-lara Service Contract, which governs wages for contract workers.? Because of these labor violations DOL initiated debarment proceedings against Restaurant Associates and their principal officer, Dick Cattani, on December 2016.42 If debarred, the company could be unable to bid for federal contracts for three years.? Federal contractors who steal wages from workers should. not be eligible for a single additional federal dollar. Companies like this are bad for American workers, and their contracts are an irresponsible use of taxpayer money. The second investigation pertains to alleged wage and hour violations at Wells Fargo. On September 22, 2016, shortly after the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo. $100 million for opening 1.5 million unauthorized deposit accounts,? I wrote to DOL with Seven of my Senate colleagues asking them to open an investigation into potential violations of the FLSA at the company.? The agreement cited a sales culture at Wells Fargo characterized by stringent quotas, and in the wake of the scandal current and former employees came forward in droves to describe threats of termination, mandated unpaid overtime, harassment, and other forms of 3" Mike DeBonis. ?National Push for $15 Minimum Wage Hits Home for U.S. Senate Workers.? The Washington P031. Online at: ee-hitS-lw motor-tn: .ltl facilitation Bertrand Olatara. ?Pin a Cook in the US Senate but i still need food stamps to feed my children." Gaurclian Opinion. Unline at: 4? Bridget Bowman, ?Senators Want Labor Department Audit of Food Vendor." (Mar. 22, 2ft 1 t3) (Unline at: . "1 Department of Labor. News Release. [July 7, 2016) {online at: store} "3 Theodore Sclileifer. ?Feds to Ban Firms that stiffcd Senate cafeteria workers over $1 million. in wages." CNN. Online at: hnosinner-enneom Department of Labor. News Release. Online at: ?3 Federal Acquisitions Regulation. Subpart 9.4?Debarment, Suspension, and Ineligibility. {online at: 4" Consumer Financial Protection Bureau, (Sep. 8, 2016) (Dallas at: "5 Elizabeth Warren. (Sep. 22, 2016). (Online at: marina retaliation that they experienced when these quotas weren?t met.46 Given these ?rst~hand accounts, academic reports describing similar incidences at Wells Fargo and at other retail banks across the industry, and a number of legal cases citing wage and hour violations at Wells Fargo, I asked DOL to open a formal investigation to ensure that all current and former employees were Fully being paid for every hour they worlted.4le DOL replied on September 26 agreeing to begin a ?top to bottom? review43 of all labor violations at the company and opened a webpage, to help current and former Wells Fargo employees become aware of their rights under labor law.? As of early January, investigations into possible wage and hour violations at Wells Fargo were ongoing; however, reports indicated that they were being hampered by Tammy MeCutchen, an attorney with possible ties to the Trump administration who was also representing Wells Fargo during the presidential transition period.SCI To determine whether you are committed to tnilowing through with these and other ongoing investigations at the Wage and Hour Division, I ask that you answer the following questions: Wilt you continue ail ongoing int-*estigations at the Wage and Hour Division oftne Department ofLaiior to ensure that workers i-riit not suffer setbacks in their effort to recover iost wages as a resuit of't'tte change in leadership? Witt you continue with a?eoartnent proceedings of Restaurant Associates to ensure that the workers ittito?edfederai workers and Senate employees aren ?t cheated art! of their wages and to ensure taxpayer dollars are being used responsibly? Will you continue with any other ongoing debarntent proceedings? Witt you promise to continue the Department ?s'ongoing investigation of wage and hour violations at Weir's Fargo? you ensure that Tammy tl/tcCutchen, and any other individuais who have defended Joarties to ongoing iabor investigations and therefore hat-re con?icts ofinterest with Matt Egan, "Workers tell Wells Fargo horror stories," Time (September 9, 2016) "Wells Fargo settled over its bogus accounts. but it still faces a fight from customers and ex-etnployees," Los Angeles Times (September 1 20 i 6) (on line at snap-stoly .html): Anastasia Christman, "Banking on the Hard Sell: Low Wages and Aggressive Sales Metrics Put Bank Workers and Customers at Risk," National Employment Law Project (June 2916). Elizabeth Warren. Letter to DOL. http: warren . senateno ti Ies-?docu ments ?25} 6~9r22?gl Isl-?LSALener .pd?r? 4?3 Elizabeth Dexheimer ?Wells Fargo Faces Top to Bottom Review" Labor Department Says.? Bloomherg. Onljne at: diep?arunent-savs 4?3 Department of Labor. Online at: 5? Emily Blazer. ?Wells Fargo investigation Hampered by Outside Attorney Citing a Trump Tie, Labor Department Claims.? Wall Street Journal. Online at: mtg-Tn omnideetwrses siti strenuous?t Le antagonistsear;ongoingfederal labor investigations are not given positions in the Department or are recased?fi'onr any and all involvement in the Wells Fargo case or any other related case? IMPLEMENTING CONFLICT OF INTEREST RULE If con?rmed as Labor Secretary, you will be responsible for overseeing the Employee Bene?t Security Administration (EBSA), the agency at ?301.. charged with ?foster{ing], promote[ing], and develop?ng] the welfare. . .of retirees?? EBSA enforces ERISA the federal law that sets standards for and protects employees in employment?based pensions and retirement plans.J2 One?third of households on the verge of retirement don?t have a single dollar saved for retirement and nearly two?thirds have saved less than one year?s incoine.53 With 10,000 of these baby boomers expected to turn 65 every single day for the next twenty years, we are on the precipice of a deep retirement crisis.54 Given the size of the pension and retirement savings shortfall in the United States, it is critical that we have strong EBSA enforcement at DOL. Part of your job as Labor Secretary will be to ensure that rule to protect savers from financial adviser conflicts of interest is fully implemented and enforced. In April of2016 DOL finalized this rule to require all investment advisers to give retirement investment advice in their clients? best interest.53 Con?icts of interest in retirement investment advice are costing AmeriCans more than billion in lost retirement savings every year.56 Implementation of the rule begins April 10, 201? unless the Of?ce of Management and Budget permits the Trump Administration?s requested delay.? Even before the rule has been implemented, major financial institutions such as Fidelity, Charles Schwah, BlackRock, and others have already announced that they are slashing fees for their hands.? That is money that used to be going to giant financial institutions and ?nancial advisers that is now going straight to the retirement accounts of hardworking Americans. 5' ?Our Mission," United States Department of Labor (onlinc at 53 29 US Code Chapter 13. Employee Retirement Income Security Program. Dnline at: 53 Nanci Hellmich. ?One-third have almost no retirement savings.? USA Today. Online at: him; 5,3,1 {llji??d ?12 I "no-reti reinent-savin its-"2 (ill'l?ttl ?ll 5? D'Vera Colin and Paul Taylor. ?Baby Boomers Approach Pew. Online at: Irena; elm It 55 Federal Register. Vol. No. 68. April 3, 2016. Online at: imp: achepgsoghgoyg?ederal The White House. ?Fact Sheet: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees.? Online at: 57? Sarah ?Labor Department to Delay, Revisit ?duciary rule." Reuters. Online at: 53 Tom Anderson. ?Fidelity join-s BlackRock, Schwab in cutting ETF expenses.? CNBC. Online at: Imp; wuss 6 r- 5 nd s-i vestors. ltln?'lj 10 In addition to bringing down sky?high fees, the rule also puts a stop to kickbacks, fancy vacations, and other problematic incentives that bene?t ?nancial advisers but not retirees. Several large Fortune 500 companies have already announced that they will no longer offer investment advisory services on a commission basis?effectively removing the incentive for financial advisers to sell products that net the adviser a bigger payday but are not in the consumer?s best interest.? On Friday, February 3 2017, President Trump issued a memorandum directing DOL to ?examine the Fiduciary Duty Rule,? and ?prepare an updated economic and legal analysis concerning [its} likely impact.?60 The memorandum also directs DOL to ?publish for notice and comment a proposed rule rescinding or revising the Rule? should it determine that the rule is ?inconsistent? with ?administration priorities?? If con?rmed as Labor Secretary, you will be charged with overseeing this examination and analysis. Given the positive changes in the market identi?ed above, any efforts to roll back these new protections will be devastating to consumers. Rollbacks would also disadvantage those honest and hardworking financial advisers and broker dealers who will now be able to compete on a levei playing field. Dismantling this rule wouid mean that advisers who already put their customers? interests ?rst will once again have to compete against the ones who don?t. in addition to ensuring that this rule is implemented without delay, you also have the authority to enforce the new rule. Every time a company skirts this new rule, retirees will suffer. Strong enforcement is the best way to deter future violations. Your company?s track record with employer-sponsored retirement accounts at CKE calls into question your ability to protect Americans saving for their retirement at work.?2 According to an analysis by Reuters and an industry research firm, of your company?s retirement plan based on information you disclosed to EBSA, your company?s retirement plan was riddled with high?fee investments and low participation rates and was less generous than the plans of your peer cempanies in the fast food industry.63 To determine whether you will enforce the laws that protect hardworking Americans that are saving money fer their retirement in employment?based retirement accounts, I have the following questions on this subject: 5" Investment News, Bank ofAmerica Merrill tells advisers to stop selling mutual funds in brokerage lRAs now (Nov. 1, 2016) 61 1 til flarnerica-m will}; Investment News, JPMorgan Chase will stop charging commissions 0n IRAS due to DOL ?duciary rule (Nov. it], 2016) tel commissinnsrun-iras-due-to-dcl 5? ?Presidential Memorandum on Fiduciary Duty Rule.? The White House. Online at: to a] 1rd ?32 ?Trump?s Labor Pick Stift?s Own Workers on Retirement Plan.? Reuters. Online at: 1 (ill lie? 11 The memorandum President Trump issued on February 3 requires you to conduct a new economic and iegal analysis of the Fiduciaryt Rule, and, depending on the results of this analysis, publish a new rule or rescind the rule. Did the President or anyone in the White House. on the transition team, or at DOL consuit you about the contents of his memorandum? {fat}, please fist the names afaH parties you consuitea? with and send any correspondence on this topic. What information wit! you review as part of this assessment? you commit to only reviewing it?ormation that is independent and is not funded or otherwise compromised by ?nanciai industry ptayers with a vested interest in the findings? Piease identi?t career and poiiticai staff at DOE that conduct the anaiysis. Do you have any reason to beiieve that the?ndings of the new anaiysis wiil be any different from the detaited, muiti~year anaiysis of the costs and benefits of the ruie that was aiready conducted by DOL before the proposed rate was issued or in the extensive Reguiatory Impact Anaiysis that was issued at the time the ruie was finatizea'? sfso, i-vhy? The mett?torandum asks you to consider litigation costs and possible disruptions to the financial services sector in your economic and iegai analysis, Witt you aiso cansider the fuii bene?ts ofthe ruiefor retirees and consumers in addition to any potentiai costsfor the ?nanciai industry? Wit! you refrain??om taking anv additionai action to deiay or iimit the rule untii your anai ys is is complete? Witt you inform Congress on an ongoing basis of the status of your e?orts? if the ruie becomes appiicabie on Alert)r it}, 20! wit! you enforce it to the fattest extent ofthe tow? What criteria wit! you review to determine if the rate is working as expected and to determine if your enforcement e?orts are e?ctive? Mu office has issued two reports on kickbacks like iavish vacations, tropicai cruises, and other prizes that are offered as incentives to saiespersons in the annuities industry. 6" Do you believe that these incentives couid encourage a satesperson to recommend a product that is not in the best interest of the customer? Elizabeth Warren. ?Villas, Castles, and Vacations: How Perks and Giveaways Create Conflicts oflnterest in the Annuity Industry" Unline at: EL-?isnaur 12 GENDER- AND DISCRIMINATOIN AT CKE AND ITS FRANCHISES Throughout your tenure as CEO of CKE Restaurants, you have defended the company?s record on economic issue-s affecting women and minorities, noting that CKE ?provide[s] significant employment opportunities for minorities. . [and] signi?cant employment opportunities for women": ?[a]bout 62% of our Company employees are minorities. 62% of our employees are women??5 You claim to be ?proud? of diversity.?56 During the early stages of the retent presidential campaign, you also expressed concern over the treatment of women and minorities by the Republican Party. In October 2015, you criticized thenwcandidate Donald Trump for his derogatory comments towards women and minorities. Mr. Trump, you stated, should not ?be telling female voters that the one woman running for the Republican nomination isn?t attractive enough to president?? You wrote in your blog that his statements ?con?rm[ed] the Democrats" narrative of Republicans as the bigoted, anti-woman, anti?immigrant party!? Your actions as CEO of CKE Restaurants, however, are not consistent with your statements in support of women, minorities, and families. CKE Restaurants has a poor record when it comes to gender? and sex-based discrimination. Under your leadership, CKE has consistently spent approximately $130 million annually on advertisements?madvertisements featuring scantily clad women eating hamburgers in sexually ailuring postures, designed to attract ?yoting, hungry guys.?69 According to you, ?beautiful women eating burgers in bikinis" is ?very American? and re?ects your personal values: used to hear, brands take on the personality of the (3130.. .in this case, [Carl?s Jr. and Hardee?s]. . .did take on my personality?? By allowing advertisements to re?ect your ?personality,? however, you have exposed your company?s empioyees to tangible harm. A recent survey of CKE Restaurant workers found sexual harassment was "uniquely pervasive" at your stores: 66% of female employees had experienced ?meanted sexual behaviors at work??cornpared to just 40% of is Andrew Puzder, Written Testimony ofA no?reut F. Feeder. CEO of XE Restaurants Hoiciings, inc, 0n the Forty Hours is nit Time Act Before the Senate Heoith, Education. Labor and Pensions (online at Andrew Puzder, Written Testimony-i ofAno'rew F. Feeder. CEO Restaurants Hoidings, inn, 0n the Forty Hours is Fttii Time .slct Before the Senate Heoith, Education. Labor and Pensions Committee (online at Andy Puzder, ?What an Election Cycle This Should Be for Republicans,? Rent Cieor (October 2, 2015) (online at an eis?'imt Crete Sill-.ltanJJ. ?3 Andy Puzder, "The important thing is ?nding a candidates who can win the presidency, notjust the Republican nominatign," Am}: Parade;- '3 Bing {October 14, 2015) (online at ?9 Suzanne Vranica, ?For Hardec?s and Carl?s Jr., Sex Sells," trl?oii Street Jottrnoi (May 26, 20k?) (on?line at http: Stephanie Ciifford, ?Carl?s Jr. Tries to Go After the Young, and Hungry, Skateboarding Fan," titenr York Times {March 17', 2009) (online at i Satlcohtlni}. i? Jacob Pramuk, ?Trump expected to name fast food CED Andy Puzder as pick for Labor secretary: Source," (December 3, 2016) (online at in; form??gen; 13 women in the fast food industry as a whole.? One driver of this sexual harassment appears to be sexualized commercials: one employee, for example, has reported harassment from customers who ask ?Why I don?t dress like the women in the commercials?? Indeed, gender discrimination was ?flagrant? at CECE?workers in Tennessee, for example, have reported working with male co?workers who ?rubbed or touched [their] buttocks or breasts at work.??3 Racial discrimination is also pervasive at CKE Restaurants and its franchises. In fact, since you took over CKE in 2000, Hardee?s and Carl?s Jr. stores ?have been hit with more federal employment discrimination lawsuits than any other major US. hamburger chain.? Race discrimination complaints against CKE?run and franchisee-run stories ?read like stories from the 1940s or ?50s, before civil rights laws were ever enacted.? 7'4 In one case, a Hardee?s supervisor in Tennessee peppered an African?American employee with racial slurs as a general manager looked on; later, the general manager texted the employee ?a picture of what appeared to be a Ku Klux Klan In another, an African-American teenager in California worked with a white supervisor who ?shared his view that white people were superior to those of other races" and bragged about a tattoo ?he planned to ink. ..on his forehead depicting a black victim.? 3 As Labor Secretary, you would be responsible for enforcing the laws that protect female and minority employees from discrimination and harassment. Sexual harassment is a form of sex discrimination that violates the Civil Rights Act?? DOL is responsible for issuing guidelines and implementing rules that target ?a variety of barriers to equal opportunity and fair pay, including pay discrimination, sexual harassment, hostile work environments, [and] gender identity and iamily caregiving In addition, DOL oversees Equal Employment Opportunity (EEO) programs?which prohibit discrimination on the basis of race, religion, sex, national origin, disability, or genetic infonnationw?funded with federal dollars through its Civil Rights Center?8 The "uniquely pervasive" sexual harassment and racial discrimination that occurs at your restaurants raises concerns about your willingness to follow and enforce DOL rules. l' Restaurant Opportunities Centers United and Corporate Accountability International, Seer-elegy of Labor Violations? The Low Reed Business of K5 Restaurant Inc '3 Andrew Feeder (January 10, 201'?) (online at .tatattire.lirtadiepertJl Literal)- "l2 l3 Robin Urevich, Capital Main, ?Civil Rights Suits Plague Corporation Run by Labor Pick Andrew Puzder," traversal (Januanf 23, 2017) (Unline at 7? Robin Urevich, Capital :51: Main, ?Civil Rights Suits Plague Corporation Run by Labor Pick Andrew Puzder," Newsweek (lanuary 23, 20 (online at nerd 7'5 Robin Urevich, Capital 3: Main, ?Civil Rights Suits Plague Corporation Run by Labor Pick Andrew Puzder,? Newsweek {January 23, 2017} (online at li- 7'5 American Association of University Women, ?Know Your Rights: Workplace Sexual Harassment? (online at apes . as aw we-do?ega l?resoli recs-i know?yo ur-ri e-sexua -li arassmentf} 77 See Donna Lenhoff?, ?That Was Then. This is New,? US. Deparnrrenr ofLabor Bing (January 28, EOIS) (online at Office of Federal Contract Compliance Programs, Proposes Updated Sex Discrimination,? US. Department of Labor {January 28, 2015) (onlinc at ?3 United States Department of Labor, ?Equal Employment Opportunity? (online at JI. 14 Americans of ail races and genders deserve to know whether you will enforce the laws that protect them at their jobs. To help me understand your positions, I have the following questions on this subject: Why do you believe that sexuai harassment has been "uniquer pervasive? at Harriee ?s and Carl's Jr. stores? i'iv?hat steps have you taken as CEO to address these probtems? ii?hy do you beiieve that Cari ?s Jr. and Horace ?s restaurants have "been hit with more federai employment discrimination iawsaits than any other major US. hamburger chain? What steps have you taken as CEO to tia?dress race-based disorimination occurring i-rithin XE restaurants? On June 14, 2016, the Of?ce of Fedora} Contract Compliance Programs (OFCCP) at DOL issued a final rule, Discrimination on the Basis of Sex, which updated sex discrimination regulations to explicitly include ?the protections against compensation discrimination; sexually hostile work environments; discrimination based on pregnancy, chiidbirth or related medical conditions; and discrimination based on unlawful sen stereotypes, gender identity, and transgender status??9 Do you agree with the substance of these reguiations? Wouid you commit to?tiiy enforcing this rule, shouid you be com?irmed as Labor Secretary? Piease describe the speci?c steps you would take to improve enforcer-neat of this rate. and the speci?c metrics you use to measure the e?ectiveness of the ruie and its enforcement by DOL. Civil Rights Center ?oversees EEO in programs and activities receiving federal ?nancial assistance" from DOL. The Of?ce of Federal Contract Compliance Programs, meanwhile, oversees EEO programs among ?employers holding federal contracts and subcontracts.?3U you ensure that DOL ?s Civii Rights Center is?tiiy funded, so that Americans are protected??ont discrimination on the basis ofrace, reiigion, sex, nationai origin, or genetic information? Witt you ensure that DOL ?s Office of ea'erai Contract Cot-npiiance Programs is fatty funded, so that einptoyees offecierai contractors are protected??om discrimination on the basis afrace, reiigion, sex, nation-at origin, or genetic information? 7'9 United States Department of Labor, Labor Department Announces Updated Sex Discrimination Regulations for Federal Contractors? (June 14, 20160 (online at 5? US. Department of Labor, ?Equal Employment Opportunity" (online at tips-gt inn). 15 FEDERAL CONTRACTORS A large fraction of the American workforceearound 22%, as estimated in 2002?is employed by contractors of the federal government, and taxpayers doie out around $500 every year to these companies.EH DOL is responsible for enforcing several laws speci?c to these contractors, including the Davis-Bacon and Related Acts, McNamara-O?Hara Service Contract Act, and the Contract Work Hours and Safety Standards Act.32 Enforcement of these laws is particularly important because they protect the rights of many workers and ensure that taxpayer dollars that pay for federal contracts are used responsibly. Contractors provide a wide variety goods and services, from airplanes for our military to cutting-edge medical research to serving the food at cafeterias on federal property. Unfortunately, many federal contractors, including some of the largest, have been caught in repeated and serious violations of labor laws. A 20i0 Government Accountability Of?ce Report found that half of the largest wage theft penalties were paid by 21:} federal contractors.83 And a report by the staffof the Senate HELP Committee found that between 2007 and 2012, nearly half of the penalty dollars assessed by OSHA were paid by federal contractors, and that 42 Americans died as a result of OSHA violations by contractors?? The executive branch maintains signi?cant control over the procurement process, and President Obama has taken several steps (mostly via executive order) to address the rampant labor abuses by the federal government?s contractors. The 2014 Fair Pay and Safe Workplaces Executive Order, for example, standardizes acquisition regulations across agencies, allowing contracting of?cers to assess companies in light oftheir labor violations over the prior three years.85 Other rules have established basic protections such as paid sick leave, a $10.10 minimum wage, and discrimination protections for employees of contractors.86 Ending labor 3? O?Leary, A. ?Making Government Work for The federal government's role as employer and contractor in improving family-friendly policies.? Centerfoi- American Progress UC Berkeiey School ofLew (July 2009}. Online at: Govt Wort; For Fainiliesh?tmrticiepdf; ?Overview of Awards by Fiscal Year." USASpen-dinggov (2016). Online at: in g. govitransparencyi PagesiOverviewOwaardsaspx. 33 ?Government Contracts.? Department of Labor. Online at: 3" ?Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors." US. Government O?ice {September 17, 2010). Online at: 3? ?Acting Responsibly? Federal Contractors Frequently Put Workers? Lives and Livelihoods at Risl? [Majority Committee Staff Report]. Education. Labor. and Pensions Committee. United States Senate. Online at: 35 ?Executive Orderu-?Pair Pay and Safe Workplaces.? The White House, (Mice of-rire Press Secretary {July 31. 2014). Online at: 4itl?ii3 workplaces. 3" ?Final Rule: Executive Order 13706, Establishing a Paid Sick Leave for Federai Contractors.? Wage and Hour Division. United States Department ofLobor. Onllne at: Sex Discrimination Final Rule, Fact Sheet.? UnitedSieies Deporiinenr ofLobor. Online at: littps: ?Amended Regulation: Executive Order I 1246 Prohibiting Discrimination Based on Sexual Orientation and Gender identity." O?ice ofFedercii Contract Compliance Programs (OFCCP), United States Depornneni ofLobor. Online at: ?Fact Sheet: Final Rule to Implement Executive Order 13658, Establishing a Minimum Wage for Contractors.? Wage and Hour Division. United States Department oanhor. Onlinc at: 15 abuses by contractors witl require continued strong leadership in the White House and at DOL to protect and build on these steps and cooperation by all government entities that award federal contracts. Yet deSpite this recent progress and the troubling trends that prompted actions to address them, some have predicted that the Trump administration would target these basic protections. The Fair Pay and Safe Workplaces Executive Order is in danger under the new administration and House Republicans have already taken up a resolution in committee to overturn these important labor standards.? Given your statements on the Obama administration?s regulations, 1 am concerned about your commitment to enforcing laws that ensure that the millions of empioyees of federal contractors can work in a safe environment and buiid economic security for themseives and their families. To determine how you will enforce the labor laws that protect the Americans who work for federai contractors, and whether you will ensure that taxpayer dollars are Spent responsibly, I have the following questions on this subject: The Fair Pay and Safe Workplaces Executive Order (Executive Order 13673) allows contracting officers to consider past labor abuses when making procurement decisions. as Wouldyou advise President Trump to retain this Executive Order? Witi you commit to enforcing this Executive Order? Key provisions oftt'tis Executive Order go into effect on Api'if 25, 20! and October 25, 201.7139 Witt you itnpietnent these provisittns as scheduled? Hot-v wit! you ensure compliance ?with this Executive Order once it is itnpt'etnented? The Establishing Paid Sick Leave for Federai Contractors Executive Order (Executive Order 13706) requires federal contractors to offer covered employees up to 7' days of paid sick leave each year, giving sick leave to around 1.15 million workers?0 i-?Voutdyou advise President Trump to retain this Executive Order? Wit?i you commit to enforcing this Executive Order? 37 ?Workplace Law Under President-Elect Donald 'l?runtp: What to Expect." Jackson Lewis (Novemcher 10,2016}. Online at: piping; Penn, B. ?Trump Win Puts Labor Regulations on Life Support." Btoomberg 3er [November 10, 2016). Online at: 3? ?Executive Order--Fair Pay and Safe Workpiaces." The White House, O?ice oftne Press Secretary (July 3 26M). Online at: workplaces. Order 13673: Fair Pay and Safe Workplaces." Office ofthc Assistant Secretary for Policy. United States Department ofLabor. Online at: 9? "Final Ride: Executive Order Establishing a Paid Sick Leave for Federal Contractors." Wage and Hour Division, United States Department of Labor. Oniine at: 13766-5; 1? The Establishing a Minimum Wage for Contractors Executive Order (Executive Order 13658) gave 200,000 workers raises by setting the minimum wage for federal contractOrs at 0, with modest cost-of?living increases going forward?? Wottid you advise President Tramp to retain this executive order? commit to enforcing this executive order? The Sex Discrimination Regulations Executive Order (Executive Order 1 1246) prohibited discrimination on the basis of pregnancy and childbirth, gender identity, and sexuai orientation, and updated guidelines on fair pay and sexual harassment for contractors?2 Wortidyoa advise President to retain this executive order? Witt you commit to enforcing this executive order? In addition to the Executive Orders described above, i-vhat' are your specific plans to address the widespread iabor tat-v viototions by contractors oftnefederat' government? 13? con?rmed as Labor Secretary, i-vhat wit! you do to ensure that taxpayer doiiars are spent more responsibly? WORKPLACE HEALTH AND SAFETY if con?rmed Labor Secretary, you will be charged with enforcing OSHA. This law-? which was created in 1970 after a decade of pubiic outcry about surging rates of disabling injuries and deaths in workpieces across America?ensures that workers are safe on the job by requiring empioyers to eiiminate and remove serious hazards.93 Although injury and Fatality rates have fallen dramaticaiiy since the law was passed, in 2015 there were 2.9 million workplace injuries reported by private industry employers and 4,336 Your tenure at CKE and your public comments call into question your suitability for and willingness to take on the responsibility of preventing these injuries and fatalities. For exampie, you once wrote that you intended to open 300 more Carl?s Jr. locations in Texas, because ?Texas. . .is dominated by pro-business Republicans? and is ?known for minimal environmental 9? ?Fact Sheet: Final Ruic to Implement Executive Order [3658, Establishing a Minimum Wage for Contractors." Wage and Hour Division, United States Department ofLaoor. Online at: Factsheethtm. 9'2 Sex Discrimination Final Rule, Fact Sheet.? United States Department ofLobor. Online at: 93 30'h Anniversaiy.? OSHA. Online at: 9? Bureau ol" Labor Statistics. ?Employer Repoited Workplace Injuries and Ilinesses 2015.? Online at: [(33120 16.3. df 95 Bureau of Labor Statistics. ?National Census of Fatai Occupational Injuries in 2015.? Online at: 18 and worker health and safety regulations.?% And since you became CEO of CKE your restaurants have received 98 safety violations. More than a third of these violations were for incidents that could have resulted in death or grave physical herring? in a report my office released with Senator Murray on January 31?, several current and former l-lardee?s and Carl?s Jr. employees Wrote ?rst-hand accounts of injuries they suffered while working in your restaurants. One former Hardee?s employee from Tennessee wrote that ?While working on the grill, many of the employees, including myself, would get burned from the grease that would shoot up from the sisaling hot grill. When I asked about obtaining burn cream to alleviate the pain, I was told that they did. not have any at the time.? Another former i-Iardee?s employee from North Carolina wrote; ?Once, while I was cleaning equipment, I was burned. The store manager wanted me to use my personal insurance to go to the doctor because she did not want it to be reported. I refused and ?led a claim. She tried to make it seem like it was in my best interest to use my own insurance, but I knew she didn?t want me to file a claim because workplace injuries impacted her bouusfgg Your record of safety violations at CKE is troublesome given that if con?rmed, you will be charged with ensuring the health and safety of all American workers, not just those in your stores. To help me understand how you will enforce OSHA and conduct inspections to ensure that workplaces are in compliance with OSHA standards, 1 have the following questions on this subject: l'Vill you commit to pursue all penalties allowed by lawfor employers who put their workers in harm is way? Will you commit to pursuing criminal penalties. including jail time, for employers who wil?itlly violate OSHA and cause the death of an employee? Will you commit to ensuring that OSHA isfitlly?tnelecl so that it can continue its inspections and enforcement efforts? Even when OSHA it can?t inspect every workplace every year. What types of inspections will he the highest priority in the agency and what industries will you prioritize? in June, OSHA ?s new Silica Rule. which will save lutna?reds of lives lay protecting the 2. 2 million workers esposea? to silica in their workplaces from diseases like silicosis and lung cancer. went into effect. Will you commit to ensuring that. the upcoming compliance dates for industry are implemented as currently set forth in the final rule? Will you commit to enforcing this rule and inspecting workplaces to ensure that this rule is being preperly 9" ?Texas and California spar over Jobs and Taxes.? Andy Puzder?s Eiog. Online at: Dave .lamleson. ?Donald Trump?s Labor Pick Should Know Worker Safety Laws. His Company?s Been Fined for Breaking Them." safety_us_584l?l i09e4h?4c3e2bb1494'i 95? ?Charbrioled: Workers tell all about life under Puzder." A HELP committee Minority Staff Report. Online at: 19 implemented? And, will you defend the rule against any ongoing legal challenges in the courlsi?g In late March of20l 7, a newly?nalizea? rule to protect workers??oni exposure to beryllium, a chemical that can. cause lung cancer and chronic beryllium disease, will go into effecting Will you enforce the beryllium rule you are confirmed? Will you commit to adhere to the currently scheduled compliance waier?rll and not delay compliance of this ifs-saving rule any?irtner? CORPORATE WELFARE As a result of low wages in the fast food industry, 20% of fastwfood workers live below the poverty line, and 43% live on wages that are double the poverty line or less.?? Consequently, over half of front?line fast?iced workers rely on at least one public program? such as the Supplemental Nutrition Assistance Program (SNAP, aka food stamps), Medicaid, the Children?s Health Insurance Program (CHIP), the Earned Income Tax Credit (EITC), and Temporary Assistance For Needy Families (TANF) to make ends meet for their families. To help sopport the underpaid employees in your industry, taxpayers dish out nearly $7 billion a year.?2 A recent estimate from the National Employment Law Center suggest that taxpayer- funded safety net programs provide CKE employees with $247 million per year to offset the low wages you pay tin-nu.m3 Meanwhile, the most recent public records on CKE Restaurants show that your company reported $1.28 billion in revenue~?totaling over?$68 million in pro?ts?in 2012 alone. '04 Final Rule to Protect Workers from Exposure to Respirable Silica.? Occupational Safety and Health Administration. United States Department ofLaoor. Oniine at: ?Final Rule to Protect Workers from Beryllium Exposure." OSHA, Online at: Sylvia A. Allegretto, Marc Doussard, Dave Graham-Squire, Ken Jacobs, Dan Thompson, and Jeremy Thompson, Fast Food, Poverty Wages: This Public CostIr ofLow-Wage Jobs in lire Fast?Food industry (October i5, 2013} (online at ?13 Sylvia A. Allegretto, Mare Doussard, Dave Grahamquuire, Ken Jacobs, Dan Thompson, and Jeremy Thompson, Fast Food. Poverty Wages: This Paulie as: ofLow-H?age Jobs in the FosnFoocl Industry (October 15, 2013) [online at t'ood-industrv J. National Employment Law Project, Bllkea': How Trump 's Labor Secretory Pick Costs Taxpayers $250 Million per Fear (January 2017) (online at ii? CKE, Restaurants, Inc. Reports Fourth Quarter and Full Fiscal Year 2012 Results? (April ll), 2t) (online at Iw?soa I-vear; 2m_2_~teaaitsl- 20 In other words, as CEO of CKE Restaurants, you have implemented a business model based on paying your workers poverty?level wages, allowing your company to rake in millions of dollars in profits, and relying on taxpayers to foot the bill for you workers? basic needs. To clarify your position and your views on paying workers a fair wage, please answer the following questions: You become CEO Restaurants in 2000. For each year?rom 2000-20i6, what were the average annual wages restaurant workers, anal by how much did the average annuai i-vages Restaurant workers, and the workers in its ?anchises, increase (intiesecifor in?ation)? For each yearfrom 2000?2016, what was your annuai take-home pay, and by how much didyour annual take home pay increase (indexed for in?ation)? or each year?om 2000-20} 6. how n-tany workers at CKE Restaurants and its af?iiated franchises received taxpayertfitntied benefits geared to tow-income individuals, inciuding food stamps, hiedt'caid andpuhiic housing assistance? Hon-t much do you estimate that they received? You .have argued that the availability oi?bene?ts for low?ineome workers and families causes them. to turn down raises and promotions, stating that: "You get to a point where if you make a few more dollars you actually lose thousands of dollars in bene?ts. And, quite honestly, these bene?ts are essential for some people. The}r are how they pay their rent; they me how they feed their kids. So, what happens is, we have people who turn down promotions or, if minimum wage goes up, they want fewer hours. The}r want less hours because they are afraid they?il go over that cliff.? is this statement accurate? or each year?'om 2000-2016, piease provide an estimate of the nut-nher of your employees who have turned down promotions or asked for reducea? hours because of the "it-'eifare aim? As Lahor Secretary, your mission will he to 'foster, promote, and deveiop the welfare of the wage earners, job seekers, and retirees of the United States. is it consistent with this mission to atiowfuti-time workers to hepaiaT wages that are so tow the i must reiy on government benefits? As Labor Secretary, what specific steps i-vouia'you take to tangibiy improve the iives of workers who are forced to reiy on government benefits to make ends meet? ?15 CKE Restaurants, ?Andrew F. Puzder, Chief Executive Officer? {online at Craig Harrington, ?Fox Claims Fast Food Workers For-ego Higher Salaries To Keep Receiving ?Free StutTFrom the Government,? Media tl-tattersfor America (lane 24, 2015) (online at 20). ll? United States Department of Labor, ?Our Mission? (online at 21 CKE RESTUARANTS AS A PRIVATE COMPANY When companies are publicly traded, they are subject to extensive disclosure rules and auditing requirements that help shareholders, and the general public, assess the value and the business practices of these companies. Although candidates for cabinet positions have to disclose certain ?nancial documents detailing their personal ?nancial holdings. they are not required to disclose all aspects of their company?s financials. These disclosures allow the public to scrutinize the business practices ofnotninees that run publicly?held companies. This is not the case when nominees run privately held companies. In .iuly 2010, under your leadership, CKE Restaurants was acquired by an af?liate of Apollo Management VII, L.P., a private company.mg At the time you turned CKE Restaurants from a public company to a private one, the business was struggling. Sales at your largest chain of restaurants, Carl?s had plummeted 5.2% in the fiscal third quarter, and same-store sales dropped by 4.2% in the early part of2010.??9 Your decision to make CKE a private company removed both you and your company from the public eye, granting you more freedom to operate without scrutiny. In fact, you even said as much at the time, claiming that the ?most positive thing for me is. no longer have all the regulatory requirements? 13 And just two years later your company aborted its pian to go public, citing ?market conditions? as your rationale for keeping your business operations hidden from the public amid coatinued struggles.?I As a private company, you are not accountable to your shareholders. As a private company, you are not held responsible for your actions by the American public. Because you took your company private, you do not have to follow the laws that apply to public companies, including extensive disclosure rules and important auditing requirements. This decision deprived the public of the following information: 0 Annual Financial Statements: Unlike ail public companies, CKE Restaurants does not have to provide yearly updates on its business. As a private company, you have not had to disclose your business operations, pro?ts, revenues, risks, business results, and other important information to the SEC for the past 5 years.I Kelsey Volkmann, goes private in $lB sale to Apollo," St. Louis Business Joni-uni (Jul. l2, 2010) (online at {Jill}?! I Eidaily Supra note 21", Paci?c Coast Business Times Staff, to go private, stay local," Paci?c oust Business Times (Mar. 3, 2010) {online at Rebecca Boyle, ?Going private a premium as CKE sells to equity firm,? Si. Louis Business Jouruoi (Dec. 17, 12010) (online at 1" Carol Tice. Forbes. (Aug. 2012) (online at: http: hil?itfds-W it ran-'n- ipo-start-o f-sl umpi} ?3 "Form UZS. Securities and iirchouge Commission (online at ?Public Company SEC Reporting Requirements,? Legoi Compliance (online at Evan Tarver, "is a private company required to disclose ?nancial information to the public?" Investdpeo'in (June 24, 2015) (online at 22 - Executive Salaries: We aiso don?t know how much CKE Restaurants pays its executives. including you.' '3 But disclosure isn?t the only thing CKE Restaurants has avoided by going private. Both you and your company have not been required to follow other SEC rules, including: 9 Say-On-Pay: Public companies have to ask their shareholders for approval of all compensation plans for corporate executives. CKE Restaurants can pay executives such as its CEO and President A whatever it wants.I14 I Clawback: At a public company, if an executive receives a bonus or other compensation based on a misstatement of the company?s acCounts, they may have to pay it back. Since you made CKE a private company, you don?t.1 '5 Auditing: Under the Sarbanes-Oxley Act, public companies must develop internal controls For financial reporting, and must have an independent auditor attest to both the controls and the financial statements. This ensures that a company reports true and accurate information to both the public and its shareholders. CKE Restaurants is under no such obligations. 1 ?5 The next Labor Secretary will be in charge of programs impacting of workers and businesses. It will be his or her duty to enact regulations protecting workers from discrimination and unsafe working conditions; to enforce rules ensuring economic opportunity for all workers; and to administer programs providing for millions of unemployed men and women. Your record as President and CEO of a large corporation speaks directly to your ability to serve as our next Labor Secretary. Americans deserve to know how their next Labor Secretary has handled his own employees and business operations. To help determine your qualifications, 1 have the following questions on this subject: zis at private company. you were not required to gain opprovoi?'oot your shareholders for executive compensation packages. Wit! you disclose the years worth of i publicasp). ?3 See id. ?4 15 U.S.C. TBj-dthE}; see Matthew J. O?Hara, ?Staying Private Avoids SEC, but Not All Regulation,? American Bar Association {May 8, 2012) {online at i2?05 2-private?public-sec?urities- regulationhtmi}. "5 Supra note 22; see Dave Michaela, Proposes Executive-Pay Ciawbacks When Companies Restore,? Biootnoerg {.lul. 2015) (online at 15 U.S.C. 7262; see Matthew .F. O?Hara, ?Staying Private Avoids SEC, but Not All Regulation," American Bar Association {May 8, 2m 2} {online at i2-private?public-securities- 23 executive compensation packages. including salary, bonuses. stock options, and any otherjorm of compensation? Wit! you also disclose the average salary of workers in Harries ?s and Car! '5 Jr. stores? CKE Restaurants does not have to be accountabie to the pubiicjor its internal accounting and reporting systems. Wili you submit to an independEnt audit ofyour company ?s internai controls amifinanciat1 statements from the iastfive years? By taking CKE Restaurants private. you sacrificed the interests oft'tlze public in order to save your struggling company. you disclose aii?nanciai information for CKE Restaurantsfor the last?ve years in order to provide the pubiic with compiete disclosure on your business activities anal?nanciai performance? You he in charge of programs impacting miit?ions of workers. you provide information regarding the compensation, benefits, and advancement opportunities for empioyees ofHardee ?s and Cart is Jr. restaurants over the iast?ve years? FAIR SCHEDULING LEGISLATION The use of on-demand scheduling practices has increased in recent years, particularly in service sectorjobs in the restaurant, retail, and cleaning sectors. Gin-demand scheduling includes calling workers into work at a moment?s notice, or sending workers home unexpectedly before the end of their scheduled shift when business is slow. These practices are particularly problematic for women, who are the primary or co-breadwinners in almost two?thirds of working families, and are more likely than men to work in jobs with nonstandard hoursm {June-all and on-demand scheduling makes it virtually impossible fer workers to plan a monthiy budget, to accommodate a second job or go back to school, or to arrange for childcare or other family ohiigations. Recent research suggests that unstable and unpredictable schedules are associated with income volatility, stress, and less time spent with children.118 According to ?rst-hand accounts from workers in Hardee?s and Cari?s Jr., your company Frequently used onvdemand scheduling practices. Workers described being forced to clock out early and receiving smaller weekly checks than they expected, and managers described being forced to cut hours, sending workers home unexpectedly.119 "7 National Partnership for Children and Families, Scheduies That Work Fact Sheet (July EDIS) (ouline at gagigngl pattnersh i ,olg'ggsgearch-l ibra ry- wortgp gigglfaimesst l-oouortnn itvt?sc tied it les-that-work-nc ts assassins. ?3 Bridget Ansel, ?Are Unpredictable Schedules Harming U.S. Worker-5? Health?? Washington Center for Equitabie Growth. Online at: ?9 ?Charbrioled: Workers tell all about life under Puzder.? A HELP committee Minority Staff Report. Online at: taut..15assasarrwen teat! mamstilttabraikstkao_t_n~ 24 In 2015, I reintroduced the Scheduies that Work Act with i8 of my colleagues in the Senate to bring some basic fairness back to work schedules. This provides for two weeks advance notice of schedules for workers in the food service, retail, and cleaning sectors and allows workers to request changes to their schedules to accommodate family obhgahons, a second job, or continued education without fear of retaliation.'20 In a recent focus group on work fatnin policy with working?class parnets in Ohio, mostly supporters of President Trump, the Schedules that Work Act was by far the most popuiar policy option among the participants.?? 1 have the following questions for you on this matter: As Secretary of Labor, what speemc steps would you take to improve the working conditions of tow-wage workers in tirefooti service, retail, and cleaning sectors? Wilt you support the passage ofthe Schedaies that Work Act? if not, treat are your pians for introducing fairness into work schedules so that workers are able to arrange for eniidcare, jaggie a second job, or go back to schooi? FRANCHISING AND SMALL BUSINESS OWNERS As the CEO of a franchisor and the past director of the International Franchise Association you?ve Spoken out on numerous policy matters related to the franchise business Indeed, CKE Restaurants? business model, like those of many fast food chain companies, relies largely on franchising for its success. most recent SEC ?lings (in 2012) revealed that there were 1,349 Carl?s Jr. restaurants, 926 of which. were franchises, and 1,936 I-Iardee?s restaurants, 1,466 of which were franchises.123 One topic you have discussed at length is the National Labor Relations Board?s joint employer doctrine which holds that both the parent company (franchisor) and franchisee are jointiy responsible for the employees with respect to collective bargaining?? This means that employees can negotiate for higher wages and better workplace safety protections with the parent company that ultimately controls the core aspects of the business, and not just the owner of their particular franchise. You?ve said that requiring parent companies to be jointly '20 The Schedules that Work Act. Introduced in the 14?" Congress. Oniine at: l4lh- roneimmersiontitslitlt 'Z'IIistitute for Family Studies. ?Work-famin Poiicy in Trump?s America: Insights From 5. Focus Group of Working Class Millennial Parents in Ohio." Online at: :23 Names Seven Franchise Leaders to its Board of Directors.? international Franchise Association. {Online at: 123 ?Form CKE Restaurants, Inc. United States Securities and Exchange Commission (December I2, 2912). DnIine at: ?34 ?Board Issues Decision in Browning-Ferris industries." National Labor Relations Board. Online at: ferris-industries 25 responsible for collective bargaining wonld ?destroy that [franchise business] model? and have said that the ?franchisee alone is responsible? for labor decisions. I15 You?ve also publicly opposed the longstandingjoint employer doctrine with regard to the FLSA, which takes the and other laws' broad de?nition of employment to hold the multiple entities responsible for each worker accountable for violations of labor laws. 12? This is important because it ensures that large parent companies are held responsible for systematic labor violations that happen in their franchises and among their subcontractors. You have argued that CKE should be exempt from responsibility for workers in its franchised restaurants because it would interfere with an ?entrepreneurial system that works.?127 Ultimately, however, your company bene?ts greatly from a narrower joint employer standard because it would allow you hide behind the franchise model to dodge all legal reSponsibilities to your workers. This allows you to squeeze every dollar of pro?t possible out of workers and franchisees at as little risk and as little cost possible to your company. In fact, it?s not just labor liability that the franchise model shields you from; it also allows you to pass many of the costs of doing business along to the franchisee. Franchise Disclosure Document for l-lardee?s, for example, estimates the initial investment required to open a Hardee?s restaurant to be between $1,426,500 and $1,949,000, including as much as $45,000 in fees paid to CKE and not including real estate costs and annual royalties};3 These costs are all paid by franchisees. The steep initial costs of opening a franchise with CKE belie your justification to your opposition to labor laws and regulations, such as the minimum wage, by claiming that they damage the ?small business? franchisees of Carl?s Jr. and Hardee?sdzg Potential buyers need substantial resources to become a franchisee at CKE. Characterizing this ?entrepreneurial system" as a ladder to the middle class through small business ownership is a mischaracterization given the sizable the initial investment required to franchise with CKE. 13? Given the substantial start?up costs required to open a franchise, and relatively little help or risk-sharing from CKE once opened, it is no wonder most of franchisees are not actually small business owners. Together, the Franchise Disclosure Documents for Hardee?s and ?35 ?Written 'l'estimony F. Puzder, CEO Restaurants Holding, inc." Testimony to the House of Representatives Education and the Workforce Committee. Online at: ?Joint Employment Under the FLSA and UnitedS'totes Department ofLabor'. Onlinc at: ?27 ?Labeling Franchises as Joint Employers will Negatively Alter the Employment Landscape: Andy Puzder?s Blog. Online at: landscape! ?Franchise Disclosure Document." Hordes '5 Restaurants, LLC (May 24, 2016). ?39 Levine, M. Schneier, C. ?Trump chooses Puzde'r as labor secretary.? Politico (December 8, 2016). Online at: i onald-tru mpaadmiuistrarion?u16H Blandrew-puzder-lab or?secretaIy-truinp-ZBZS 68. '30 Ponder, A. ?Labeling Franchisees as ?Joint-Employer? Will Negatively Alter the Employment Landscape.? Amp '3 Blog (June 26, 2014). Online at: 26 Carl?s Jr., both from 2016, list a total of 2,6?9 franchises, but only 249 franchisees.'3' This means that the average Hardees and Carl's Jr. franchisee oWns 11 restaurants?;533 The average CKE franchisee is not a small business owner. Rather, the average franchisee spent millions ofdollars opening restaurants, employs hundreds of workers, and is often part of a large investment group that owns dozens of franchises with CKE and with other brands. Boddie-Noell Enterprises, Inc., for example, owns more than 330 Hardee?s franchises in four states and employs nearly 10,000 people. ?34 Americans deserve to know how your business model effects small business owners, whether your company hid behind franchising arrangements to dodge legal responsibilities to its workers, and whether your statements about promoting upward mobility for your workers are borne out in your record at CKE. I therefore have the following questions on this subject: Couldyou clari?t now your current business, CKE Restaurants, benefits small business owners and promotes mobility i-vl'ten it costs at least a million dollars to open up a franchise and the average ?'anclrisee owns restaurants? How many of your current ?'ancnisees began as hourly workers at either Hardee ?s or Cart 15' Jr. What is the defaul rate for, franchisees of KE Will you commit to reinforcing the FLSA and other relevant laws consistent with the longstanding joint employer doctrine? Will you hold parent companies responsible for violations oftlte minimum range or overtime laws oftlte workers in their?'ancltises where the parent company is legally culpable? What are your speci?c plans to protect the rights of workers of?'ancnisecl companies? How will you stop abuses such as wage thefl that take place in workplaces like Carl ?s Jr. and Harriee These ?gures should be interpreted as rough estimates, because the Franchise {Disclosure Document lists names of companies that appear to be af?liates, perhaps Subsidiaries oft'hc same parent company, but are counted separately by this letter?s calculation so as to provide a conservative estimate of ?anchises per ?anchisee. lfthis is the case, the same franchisee may have been counted multiple times, which would mean that the real number of franchises per franchisee is even higher than indicated in this letter. ?3 ?Franchise Disclosure Document.? tileDonald's USA, LCC (July 25, 2015). ?33 ?The QSR 50.? QSR {August 2012). Online at: ?About Buddierl?loell Enterprises, inc.? Boda?ie-Noeli Enterprises. inc. Online at: http:llbneinc.comlaboutl 27 CONCLUSION If con?rmed as Labor Secretary, your decisions will profoundly impact the lives of 150 million American workers Your policy choices will affect their paychecks, their ability to build ?nancial security for themselves and their families, and their health and safety. It will be your job to enforce the hard?won labor protections that keep w0rkers out of harm?s way and ensure that they are paid a fair day?s wage for a hard day?s work. America?s labor force built this country and America?s labor force is essential to the future success of our economy and our nation. I look forward to hearing from you and to reviewing your answers to my questions during your confirmation hearing. Sincerely, Elizabeth arren United tes Senator 28