A class action lawsuit was recently filed in California against Carl Karcher Enterprises LLC (CKE) by one current and one former employee of the company's famous fast food burger chain, Carl's Jr. The suit alleges that Carl's Jr. unlawfully suppresses employee wages by preventing franchisees from hiring workers from other franchisees. The employees claim that CKE and its CEO, Andrew Puzder illegally
Lawsuit Alleges an Unfair Market for CKE Employees
The proposed class action suit was made against CKE by Luis Bautista, a Carl's Jr. franchise shift leader, and Margarita Guerrero, a former shift leader for another franchise. The suit claims that both CKE corporate restaurants and franchisees are "supposed to compete with each other for employees" yet adhere to a no-hire agreement not to solicit or hire restaurant-based managers or shift leaders from other CKE restaurants. The no-hire agreement must be signed by all CKE-branded franchisees before opening a restaurant.
The lawsuit also claims that within a free market system, the market for workers of CKE is far from free. The lawsuit states, "CKE and Puzder cannot have it both ways. 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 thousands of workers."
Lawsuit Alleges Unfair Wages and Poor Working Conditions
According to the suit, all CKE locations employ general managers, and up to five shift leaders who staff certain locations and provide training to employees. The suit claims that Bautista was promoted to a shift leader position in 2015, and that despite his job duties increasing significantly, his wages were raised by less than $2 per hour. Unfortunately, Bautista knew that he could not transfer to another franchise that may have offered a higher hourly rate because it was common knowledge amongst shift leaders that they could not transfer elsewhere.
Guerrero, a former Carl's Jr. shift leader, left the company after one year of working in the role. The suit alleges that "her working conditions were atrocious" as she was made to work past the end of her own shift to fill in for workers who failed to show up for their shifts.
According to the plaintiffs, Carl's Jr. shift leaders are paid about $25,000 annually.
Bautista and Guerrero are seeking unspecified damages as well as a court order that enjoins CKE from enforcing the "illegal no-hire" term in its franchisee agreement.
Carl's Jr. Class Action Lawsuit: For Further Reading
- Trump labor nominee's Carls Jr. chain sued in LA over wages, working conditions via MyNewsLA.com
- Suit against Carl's Jr. parent company alleges unfair business practice to suppress wages via LATimes.com
- Employees file antitrust class action against Puzder's CKE Restaurants via Reuters
California Law Protects Employees from Wage and Hour Violations
If you are made to adhere to poor working conditions and think that your employer is violating California wage and hour laws, our expert Los Angeles employment attorneys can help. Contact us today for a free consultation.