December 02, 2016

The fast-food executive whose name is rising to the top of Donald Trump’s labor secretary shortlist would need to resolve possible conflicts of interest if appointed to the Cabinet.

Andrew Puzder, chief executive officer of CKE Restaurants Inc.—parent company of the Hardee’s and Carl’s Jr. brands—met with the president-elect to discuss labor reforms Nov. 19, the Trump transition team said. Puzder remains in communication with the team about his possible nomination to head the Labor Department, a source familiar with the matter told Bloomberg BNA Dec. 2.

Puzder’s switch from the private to public sector would likely raise questions about how his 16 years running the fast-food chain may interfere with ongoing government investigations, and it could expose him to ethics concerns. Puzder would inherit an agency that can investigate his franchised and company-owned stores for violations of wage-and-hour, occupational safety and other laws.

Most of the investigations at Hardee’s and Carl’s Jr. that have been settled recently by the DOL’s Wage and Hour Division pertain to franchisee-owned stores. Should Puzder be named labor secretary, he may also run into at least perceived ethics issues related to enforcement activity at the company’s mostly franchised stores.

A labor secretary may sometimes be involved in company-specific investigations, Michael Hancock, a former WHD assistant administrator for policy, told Bloomberg BNA.

“The secretary might be brought into a specific case depending on the issues,” he said. “It would not be unusual for the secretary to be informed and in some cases, invoked in the resolution.” Hancock is now of counsel at plaintiffs’ firm Cohen Milstein Sellers & Toll PLLC in Washington.

This article originally appeared in Bloomberg BNA.