One current and one former Carl’s Jr. employee filed a lawsuit Wednesday alleging that parent company Carl Karcher Enterprises LLC and CEO Andrew Puzder — President Donald Trump’s nominee for Secretary of Labor — maintain a corporate structure which “suppresses wages and working conditions to ensure that franchisees make money.”
Luis Bautista, a shift leader for a Carl’s Jr. franchise, and Margarita Guerrero, who used to hold the same position for another franchise, filed the proposed class-action lawsuit in Los Angeles Superior Court.
“While CKE franchisees and CKE-operated restaurants are supposed to compete with each other for employees, they have instead agreed not to solicit or hire restaurant-based managers, including shift leaders, from other CKE restaurants or franchisees,” the suit alleges.
By allegedly acting in unison, franchisees restrict their ability to poach the others’ employees, but also protect themselves from being poached, according to the plaintiffs. The practice allows franchisees to retain their best managers without having to increase wages or improve working conditions, the suit alleges.
The plaintiffs are seeking a court order enjoining the company from enforcing an alleged “illegal no-hire” term in its agreement with franchisees, as well as unspecified damages.
A representative for Carl Karcher Enterprises, which also operates the fast-food brands Hardee’s, Green Burrito and Red Burrito, could not be immediately reached for comment.
The lawsuit states that although Puzder professes a deep faith in the free market system, “the market for CKE employees is not free.”
“CKE and Puzder cannot have it both ways,” the suit states. “They cannot eschew their responsibilities under the labor and employment laws by embracing a free-market model constituted by independent, competing franchisees, while at the same time restraining free competition to the detriment of the thousands of workers employed by CKE and its franchisees.”
Each CKE restaurant has a general manager who oversees restaurant operations, and some have an assistant manager who helps the GM, the suit states. All locations also have up to five shift leaders who staff the locations and train lower-level employees, according to the plaintiffs.
When Bautista was promoted to shift leader in 2015, his pay increased by less than $2 an hour, even though his duties went up significantly, the suit states.
“In Mr. Bautista’s experience, it is common knowledge among shift leaders that they cannot transfer between restaurants with different owners,” the suit states.
Guerrero was a shift leader for about a year until late 2016 and often worked past the end of her shift to fill in for employees who did not show up for work, according to the complaint.
“Her working conditions were atrocious,” the suit states.
Shift leaders are paid an annual salary of about $25,000, according to the plaintiffs.
“Consistent with Puzder’s philosphy and CKE’s structure, the no-hire agreement suppresses wages and working conditions to ensure that franchisees make money,’ the suit alleges.
–City News Service