Why the Puzder Nomination Fell Apart

In the end, it wasn’t Andy Puzder’s track record on labor that tanked his bid for the job of labor secretary. Liberals were always unhappy with the Puzder nomination—his history of hostility toward labor regulations made him an unacceptable choice for the head of the agency tasked with enforcing the laws that protect workers, they felt. But what changed in recent days is an emerging focus not on Puzder’s professional history, but on his home life. And it was the liabilities there that ultimately made it hard for more moderate Republicans—particularly women—to support him.  

In divorce papers from three decades ago, Puzder’s ex-wife alleged that he abused her, and she once appeared in disguise on the Oprah Winfrey show to discuss those allegations (which Puzder denied). She has since retracted the allegations, but the tape of her visit to Oprah in 1990 was reportedly shown to senators this week. And earlier this month, Puzder admitted that he had employed an undocumented worker as a housekeeper for a few years, a fact that was at odds with Trump’s commitment to cracking down on undocumented workers. He had also failed to pay the required taxes at the time. On Wednesday, the conservative publication The National Review published an editorial opposing Puzder’s confirmation both because of the housekeeper revelations and because of his past support for immigration reform.  “The case for his confirmation has diminished to the point of disappearing,” the magazine argued.

Additionally, a poll released Tuesday by Hart Research on behalf of the left-leaning National Employment Law Project that 61 percent of voters in Alaska and 65 percent of those in Maine thought their senators should vote against Puzder. Senators Lisa Murkowski of Alaska and Susan Collins of Maine were two of the Republican lawmakers reportedly undecided on Puzder. Collins had reviewed the Oprah footage, and said there were “outstanding questions” that she wanted to ask Puzder at the hearing. On Wednesday afternoon, rather than face that hearing, Puzder withdrew his nomination.

“After careful consideration and discussions with my family, I am withdrawing my nomination for Secretary of Labor,” Puzder said, in a statement. “While I won’t be serving in this administration, I fully support the President and his highly qualified team.”

The failure of Puzder to get confirmed is a blow to Trump, and it is a victory for the liberal organizations who have opposed his nomination from the start, though in the end their concerns weren’t the reasons for Puzder’s withdrawal. In their view, he was deeply unqualified for the job. “If you look at any of Puzder’s statements, you will see that he is the most anti-labor labor secretary candidate in the history of the United States, bar none,” Paul Secunda, director of the Labor and Employment Law Program at Marquette University Law School, told me earlier this week. “This guy is remarkable in his complete—not only distaste for labor regulation—but his complete flaunting of labor regulations.”

Puzder had spoken up against campaigns to raise the minimum wage, saying that doing so would push workers out of a job, while at the same time saying he’d like to replace workers with robots because robots “never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.” He’d opposed what he calls “antibusiness executive orders” signed by President Obama, including rules to raise the minimum wage for federal workers to $10.10 an hour.

The Department of Labor’s Wage and Hour Division had investigated CKE stores, as it does many other restaurant chains. Since 2004, the department conducted 108 investigations into CKE-affiliated stores, according to Bloomberg BNA, and the stores agreed to pay $153,921 in back wages for 936 employees. Around 60 percent of investigations at Hardee’s and Carl’s Jr. stores have uncovered violations of the Fair Labor Standards Act, according to Bloomberg BNA.

“You’ve made your fortune by squeezing the very workers you’d be charged with protecting as Labor Secretary out of wages and benefits,” the Democratic senator Elizabeth Warren of Massachusetts wrote, in a 28-page letter to Puzder, ahead of his confirmation hearing.

While it’s unknown whom Trump will nominate next, it’s pretty much certain that whoever it is will lead the department in a direction quite divergent from its record during the Obama administration. The Department of Labor does not make laws—that’s up to Congress—but its Occupational Safety and Health Administration and its Wage and Hour Division do decide how to enforce laws. The Obama administration was aggressive in its enforcement of wage-and-hour laws, which govern how much people should be paid for the hours they work, according to Janice Fine, a professor of labor relations at Rutgers. Obama appointed David Weil, a Boston University professor and expert on wage-and-hour enforcement, to lead the Wage and Hour Division, and Weil embarked on a project to focus enforcement in high-violation industries like the fast-food industry.

Previously, the division had primarily responded to complaints, and because workers often are afraid to file complaints, it missed violations. Weil “was really revolutionary, in trying to make the best use of enforcement dollars,” Heidi Shierholz, who was an economist with the Department of Labor from 2014 until the end of the Obama administration, told me. Much of the Obama administration’s efforts on these issues could be reversed under Trump. “The worry is that someone like Puzder who, who plays fast and loose with these regulations, who has made it really clear that he thinks that regulations are a burden to competitiveness, would not make sure that those who compete unfairly are prevented from doing so.”

There’s a significant need for smart wage-and-hour enforcement, and the department is already short-staffed, Fine said.  A 2009 survey of workers in low-wage industries such as fast food and home health care in New York, Chicago, and Los Angeles found that 26 percent had suffered minimum wage violations in the previous week, and 76 percent of people who had worked more than 40 hours in the prior week had not been paid according to overtime rules.

Other Obama-era changes are also likely to come under scrutiny. The Department of Labor under Obama cracked down on misclassification of workers, tightening the definition of who could be considered an independent contractor. In 2015, Obama signed a rule granting up to seven days of paid sick leave for employees of companies that have contracts with the federal government. Obama also issued a rule that would have increased the amount of pay employees can make and still receive overtime, to $47,476. Another Obama-era Department of Labor rule set to go into effect in April, the fiduciary rule, would have required financial advisors to put their clients’ best interest first. The Trump administration has already said it would delay the fiduciary rule.

A judge in November blocked the Obama rule that would have required employers to pay overtime to a greater number of employees; a Trump administration is unlikely to fight that decision. Puzder had said, in an op-ed in the Wall Street Journal about the overtime rule, that “rewarding time spent rather than time well spent won't help address this problem.” Puzder argued that employees in management might lose pay, but they gain “the statute and sense of accomplishment that comes from being a salaried manager.”  

Trump is known to be hostile toward regulations that govern how companies do business. Trump has spoken often of his disgust for “job-killing regulations,” and signed an executive order requiring that every agency that issues a new regulation repeal two others at the same time. Labor experts like Shierholz say that the labor secretary has an important “bully pulpit” that can be used to talk about important labor issues, but a Trump labor secretary is more likely to talk about supporting business than about helping workers. Hilda Solis, the first Secretary of Labor under Obama, said when she was appointed that “there is a new sheriff in town,” and vowed to beef up enforcement actions. Tom Perez, the most recent Obama Secretary of Labor, spoke often of the importance of raising the minimum wage and supported local efforts to do so.

Trump campaigned on a promise to restore prosperity to working-class Americans. He talks frequently of bringing jobs back in industries such as coal and manufacturing. Yet the industries that are booming—and the ones that are seeing some of the worst labor violations—are retail and food service. There were only 50,000 people employed in coal mining in January, a 35 percent decrease from a decade ago. Yet there were 13.5 million people working in accommodation and food services, a 20 percent increase from a decade ago, according to the Bureau of Labor Statistics. If Trump wants to make good on his campaign’s commitments to working-class Americans, he’ll need a labor secretary who is focused on making sure that the retail and fast-food sectors do more than provide wages—that they provide a pathway to a decent life.