CKE Restaurant Workers: California Overtime Violations still Worrisome

Anaheim, CAMany workers who were opposed to Andrew Puzder’s nomination to become President Trump’s Labor secretary are now likely less worried about California overtime and minimum wage issues, unless you are an employee of CKE Restaurants—a company that has repeatedly violated the California labor code regarding overtime.

Puzder, CEO of CKE Restaurants since 2000, is apparently not a friend to workers. He has criticized the federal minimum wage increase to $15 and opposes the expansion of rights to overtime pay. Before he stepped down as a nominee, the Los Angeles Times reported Senator Elizabeth Warren(D-Mass.) wrote to Puzder that, “My staff's review of your 16-year tenure as CEO of CKE Restaurants, Inc….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.” Warren also pointed out that the billion-dollar burger chain’s record of prolific labor law abuses and discrimination suits is more than any other major burger chain.

Fast-food workers already earn low wages. They are typically paid minimum wage (or less than) without much in the way of tips, and it can get worse for employees working in franchises such as those owned and operated by CKE – as investigations by the Labor Department’s wage-and-hour enforcement strategy recently found. Last September Bloomberg BNA reported 68,000 FLSA violations and some $14 million in back wages recovered for about 57,000 employees since 2009. Its analysis discovered about 60 percent of the investigations of CKE Restaurant’s franchises --Carl’s Jr. and Hardee’s restaurants –turned up violations of the Fair Labor Standards Act, which covers overtime and minimum wage. Some of those violations occurred in the state of California.

The Cost of Wage and Hour Violations

It's possible that not paying Hardee’s and Carl’s Jr. workers a living wage winds up costing state and federal treasuries $247 million a year in spending in public assistance programs, such as the Supplemental Nutrition Assistance Program (providing food stamps), according to the National Employment Law Project. Spokesperson Catherine Ruckelshaus told Salon that CKE paid $145,000 in back wages to 877 Hardee’s and Carl’s Jr. employees following wage and hour infractions. She said that CKE profits from the low wages paid to workers at the franchised restaurants at the expense of taxpayers.

And a New York think tank, The Century Foundation, recently published a list of US Department of Labor and Occupational Safety and Health Administration investigations of CKE restaurants over the past ten years. There were 87 confirmed violations stemming from 66 investigations.

In 2014, Puzder said his company had spent $20 million on labor lawsuits in the past eight years. No wonder labor advocates consider restaurants licensed by CKE to be prolific violators of the labor code. The company is keeping labor attorneys busy.

(CKE, headquartered in California, moves its offices to Tennessee in March 2017. About 90 percent of its restaurants are franchise-owned, including restaurants near corporate offices in Santa Barbara County. The company says Tennessee is home to several company-owned restaurants. However, the move came after Puzder was nominated as labor secretary.)