Economy

Cuomo's plan for layoff restrictions on government aid makes 'no sense whatsoever,' Fertitta says

Key Points
  • Landry's CEO Tilman Fertitta said on "Power Lunch" that making companies return to pre-crisis employment levels if they take government aid "makers no sense whatsoever." 
  • New York Gov. Andrew Cuomo has said companies that take government support during the pandemic should be required to rehire the same amount of workers they had before the crisis. 
  • "He knows nothing about running businesses. You can't hire everybody back. Our business is not coming back for years," Fertitta said.
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Tilman Fertitta on the PPP program

Landry's CEO Tilman Fertitta said Tuesday it "makes no sense whatsoever" to require companies that receive government relief to hire back all of their workers.

The casino and restaurant chain executive was asked on CNBC's "Power Lunch" about New York Gov. Andrew Cuomo's proposal to require companies that receive government aid during the pandemic to rehire the same number of employees they had before the crisis. 

"First off, I'm a fan of Mr. Cuomo's, and I think he's done a great job, but now he's in an area that he doesn't belong in," Fertitta said. "He knows nothing about running businesses. You can't hire everybody back. Our business is not coming back for years."

Cuomo said during his daily press briefing on Tuesday that, "it would be such a scandal, and a fraud if these corporations were allowed to receive government money, lay off workers, and then government taxpayers had to subsidize the workers who were laid off."

There has been a heated debate about which restrictions should be placed on companies that participate in the various programs from the Federal Reserve and the Treasury Department.

The loans to airline companies from the CARES Act, for example, required those companies to avoid layoffs until Sept. 30, but some have since cut hours for their service employees and announced layoffs that will take place after the restrictions expire. Treasury Secretary Steven Mnuchin said during a Congressional hearing on Tuesday that he believed the airlines were in compliance with the rules of the program.

Massachusetts Sen. Elizabeth Warren grilled Mnuchin during the same hearing, asking if he would consider placing restrictions around layoffs in other parts of the $2.2 trillion relief package. 

Fertitta also continued his push to let larger companies accessing the remaining money in the Paycheck Protection Program, saying that his payroll expenses were $150 million a month in normal times.

Several restaurant chains returned money from the program after the Treasury Department issued updated guidance that said large companies with access to other forms of credit should not access the program. Landry's said in April that it had decided to "deny assistance that would be made available to us" to free up money for smaller companies. 

Under Cuomo's plan, Landry's would be forced to hire back all of the employees it had laid off. The current law does not require that, but Fertitta, who also owns the NBA's Houston Rockets, said even the current restrictions on larger companies taking the money was punishing workers. 

"Because you work for Landry's and you work for Tilman Fertitta, you don't get to come back to work? That's really unfair," Fertitta said. "Because I'm not getting the money. The people at the corporate office aren't getting the money. It's strictly for Landry's employees of all of our different concepts, and my people deserved to be treated just as good as everybody else."

Landry's has reopened more than 200 of its restaurants and brought back about 15,000 of the employees it laid off, but those restaurants are running a significant loss, Fertitta said. 

"It's great to be open, it's great to bring some employees back to work, but we're far from profitable. So right now we're just churning dollars and hoping it gets better," Fertitta said.