President-elect Donald J. Trump's choice for Labor Secretary, Andrew F. Puzder, is the chief executive of a fast-food company that started as an L.A. hotdog stand in 1941 and is headquartered on the California coast. But Puzder has been publicly critical of California for years, taking aim at the state's labor regulations and higher minimum wage, which favor workers more than in other states.
Next year CKE Restaurants will move its headquarters to Nashville. In the last few years, the company stopped opening new Carl's Jr. restaurants in California because of what Puzder described as burdensome regulations imposed by the state.
Puzder made the comments in 2014 when he delivered a keynote address at Chapman University’s Dale E. Fowler School of Law.
"In most states you can still work harder, smarter, or longer than the next guy if you want to be more successful," said Puzder. "In California, our government says 'you can't.'"
"We and our franchises have essentially stopped building restaurants in California,” he added.
Puzder said the company he has headed since 2000, CKE Restaurants, would open 300 restaurants in Texas "this decade," creating hundreds of thousands of jobs, but in California it was no longer cost-effective to build or operate. In his speech, Puzder decried California labor rules that give hourly employees overtime if they work more than eight hours in a day and mandate a set schedule of rest breaks.
"Ever go to a restaurant and some employees are sitting around while people are standing in line?" asked Puzder. "They are on their required rest breaks. A general manager, as an hourly employee, may have to sit and watch his restaurant fall apart because, as an hourly employee, he's on a required break."
"California's nanny state laws tell our general managers what they can do, how long they can do it, and when they can do it," added Puzder.
More than half of the Department of Labor's investigations of CKE restaurants (under the Federal Labor Standards Act) revealed at least one violation, though a Bloomberg analysis showed the company had fewer violations than many other fast food chains.
Puzder said the company has also been the target of numerous employment lawsuits.
"Over the past eight years, we've spent over $20 million in connection with defending these lawsuits," said Puzder. "In California, it's very difficult and expensive to build a restaurant, and if you manage to build it, you're not allowed to run it."
As Secretary of Labor, Puzder would be overseeing the agency that enforces labor laws nationwide, which has raised alarm bells with workers rights groups.
"The person holding the position of Labor Secretary has tremendous responsibility to improve the lives of America’s workers, requiring its occupant to push for and implement policies that will continue to turn the tide against decades of declining wages and rising income inequality," said Christine Owens, executive director of the National Employment Law Project, in a written statement. "Given that mission, this nomination is a sucker-punch in the gut to all the men and women of good faith who believe in the mission of the U.S. Labor Department."
In his speech at Chapman, Puzder also decried the long wait times and high costs business owners face when they open their businesses.
"The Cal Green Law and the California Clean Air and Water Act alone add up to $200,000 in additional costs for every restaurant we build, and they can take two years to process," said Puzder.
There are more than 1,200 Carl's Jr. locations worldwide, according to the company.
In his 2014 speech at Chapman, Puzder said he was considering moving CKE Restaurants' corporate headquarters out of California. Earlier this year, the company announced that move officially.