WASHINGTON – President Donald Trump's pick for labor secretary outsourced his fast-food company's technology department to the Philippines, a move that contradicts Trump's vow to keep American jobs in the U.S.
Continue Reading Below
Trump has blasted, threatened and tried to charm American companies that have so much as contemplated moving jobs overseas, saying he's sticking up for American workers who aren't feeling the economic recovery and form his political base.
But a filing with the Labor Department on CEO Andrew Puzder's company — and a spokesman's acknowledgement that CKE continues to use the IT operation in the Philippines — provides a window into a key contradiction raised by the nomination.
Democrats and their allies are rushing to exploit Puzder's record on a big increase in the minimum wage, overtime rules and more as they question how well he would advocate for American workers.
"President Trump has said that he will put American workers first, but it increasingly appears this was just empty campaign rhetoric — and we saw this so clearly in who he nominated to lead the Department of Labor," said Sen. Patty Murray of Washington, the senior Democrat on the committee planning to consider Puzder's nomination on Feb. 7.
Puzder's company, CKE Restaurants Inc., notified the government in August 2010 that it was outsourcing its restaurant information technology division to the Philippines. Doing so, the agency found, "contributed importantly" to the layoffs of both CKE employees and those of an outside staffing firm at an Anaheim, California, facility. The agency's finding made workers eligible for federally funded benefits meant to dampen the impact of globalization on employees.
Continue Reading Below
"By outsourcing the function to a firm that employs hundreds of Help Desk specialists, CKE was able to improve the quality of service levels to their restaurants," the company said in a statement Wednesday to The Associated Press.
There's nothing illegal, or even uncommon, about CKE's decision to move its help desk overseas and lay off about 20 workers.
"This filing showing jobs being outsourced overseas is yet another troubling example of workers being squeezed by companies under Andrew Puzder's leadership," Murray said.
During his first week in the White House, Trump warned that he would impose a "substantial border tax" on companies that move their manufacturing out of the United States. He also promised tax advantages to companies that produce products domestically.
"All you have to do is stay," Trump said during a meeting in the White House's Roosevelt Room. His companies have regularly outsourced supply purchases and sometimes used guest workers.
Trump's anti-outsourcing message, begun during the presidential campaign, is based on the idea that the practice has hurt middle- and lower-income working Americans who feel left behind in the nation's economic recovery. Trump handily won this group of voters in the 2016 election over Democrat Hillary Clinton, and he's said from his inaugural speech on that bringing jobs back to the U.S. economy is a top priority.
In its statement, CKE defended its decision to move its IT division overseas. "The existing CKE restaurant support staff was insufficient to adequately cover the disproportionately high volume of help desk calls that occur during the early morning hours and to provide full, 24 hours per day, seven days per week coverage. So, CKE shifted its small help desk services team to a firm that provides both offshore and onshore support."
The Labor Department's determination that outsourcing cost the CKE Restaurant employees their jobs was one of more than 2,400 such certifications made in 2010.
Committee Democrats have offered up current and former employees of his companies to tell unflattering stories about their treatment while working for Puzder's companies.
At a 2013 American Enterprise Conference, Puzder said Hardee's Restaurant operators in the Southeast and Midwest were jealous of the immigrant-heavy workforce in California.
"In other parts of the country you often get people that are saying, 'I can't believe I have to work this job,'" he said. But in California, he added, "with the immigration population you always have the, 'Thank God I have this job' kind of attitude."
Puzder also has talked about deploying robots to replace American workers who demand higher wages. Robots, he said, are always polite, never late and don't sue their employers for discrimination, according to an interview with Business Insider.
A statement from Puzder released by the Trump campaign in December struck a different note, promising that he'd be "the best champion American workers have had."
Puzder tweeted on Jan. 16, "I am looking forward to my hearing."
Associated Press writer Jeff Horwitz contributed to this report.
Follow Kellman on Twitter at http://www.twitter.com/APLaurieKellman