(Adds Collins as undecided)
By Amanda Becker
WASHINGTON Feb 9 Labor secretary nominee Andrew
Puzder, the controversial business leader expected to undergo a
U.S. Senate confirmation hearing next week, will be spared an
emotionally weighted and concurrent discrimination trial against
the restaurant group he heads.
A state court in Orange County, California, has granted CKE
Restaurants Inc a delay from Feb. 27 - when the full Senate
might still be considering Puzder's nomination - to early June
for an age and disability discrimination lawsuit after the
company cited "negative publicity" generated by his nomination.
Puzder, CKE Restaurants' chief executive, has been under
fire by Democrats and labor groups for opposing increases in the
minimum wage and aiming to curb worker protections. But his
expected confirmation by a Republican majority in the Senate has
not been knocked off track.
By the June 5 trial, he may be labor secretary and well
along the way to divesting himself from the company. Puzder
agreed to divest his stakes in CKE, worth anywhere between $11
million and $55 million, if confirmed, according to an ethics
submission reviewed by Reuters.
Puzder’s confirmation hearing has been repeatedly delayed as
a government ethics office reviewed his plan to divest from CKE,
which owns franchised restaurants, including Carl’s Jr. and
Puzder also promised to divest his holdings in more than 200
assets, including Berkshire Hathaway Inc, Altria Group Inc, Bank
of America Corp and Cisco Systems Inc, within 90 days of his
confirmation. He will divest from more illiquid funds within 180
days, but he declined to provide details for some of the funds'
underlying assets, citing a confidentiality agreement.
The California case was brought by James Dombrowski, whose
employment was terminated as he recovered from a brain biopsy,
according to court filings.
CKE's franchised restaurants have faced wage-and-hour and
labor condition complaints from workers, but the Dombrowski case
is against the holding company largely controlled by Puzder.
CKE was also named in an antitrust lawsuit filed by current
and former Carl's Jr. workers in a California court on Wednesday
that alleges a scheme to suppress wages across its franchises by
using "no hire" agreements.
Dombrowski claims that he was fired by CKE when he tried to
return to work in 2015, at the age of 68, after taking a
disability leave following a brain biopsy which temporarily
CKE's attorney in the Dombrowski case, Scott Ferrell,
argued that the negative publicity surrounding CKE's business
practices due to Puzder's fame as a Cabinet nominee would hurt
the company's ability to have a fair jury trial, not that the
case would in any way hurt Puzder's ability to be confirmed.
Ferrell declined to comment on the case. Dombrowski’s
attorney did not respond to requests for comment. A
representative of Puzder also declined to comment.
CKE Restaurants has said it is up to its franchises to set
wages and working conditions and they are protected from
liability as a franchisor.
Senator Susan Collins, who is on the panel that will hold
Puzder's initial confirmation hearing next week, said she has
not made a decision regarding Puzder. Collins was one of two
Republicans to vote against Betsy DeVos, who was confirmed on
Tuesday to head President Donald Trump's Department of
“I have not reached a decision. I almost always wait until
there's a hearing, unless I know the individual well," Collins
said on Thursday.
"I’ve had two conversations with Mr. Puzder and I think
there are questions outstanding that will be, I’m sure, delved
into at his hearing," she added.
Puzder, an enthusiastic early supporter of Trump, has
lobbied against efforts to raise the minimum wage and is
expected to roll back rules aimed at curbing unpaid overtime and
improving worker safety if confirmed to head the Labor
(Reporting By Amanda Becker, with additional reporting by Sarah
Lynch, Susan Cornwell and Robert Iafolla; editing by Linda Stern
and Jonathan Oatis)