Lawsuit Alleging Antitrust Violations Filed Against Puzder’s Company

Yesterday, shift leaders at Carl’s Jr. filed a complaint on behalf of themselves and those similarly situated alleging various antitrust violations by Carl’s Jr. Restaurants and CKE, of which Andrew Puzder is CEO. The complaint was filed in California Superior Court.

The complaint is based on a “no hire” policy extending to all CKE franchises, under which franchisees must agree not to hire or seek to hire anyone who works as a shift leader or any higher position at a CKE restaurant or has worked at a CKE restaurant in the prior two years. The policy might not be a problem if all the workers were employed by CKE, but “CKE and Puzder have gone out their way” to stress that the franchises are not part of a single entity that hires and fires workers (thereby avoiding some federal and state labor protections). According to the complaint, the effect of the “no hire” policy has been to “suppress the wages of the restaurant-based managers” and “worsen[ ] working conditions” by diminishing competition between the restaurants.

The complaint was filed just as Puzder’s confirmation hearing was rescheduled for the fourth time to Feb. 16. A spokesman for Puzder said that the delays were “prompted by Puzder’s need to divest financial holdings that the Office of Government Ethics judged a conflict of interest.” If confirmed, Puzder would have to sell his stake in the fast-food companies, which are valued at 10-50 million dollars.