California Restaurants Want Fast-Food Law Up for a Vote

    A new coalition is asking for a referendum to be placed on a ballot in 2024. 

    Legal | September 8, 2022
    Fast-food stock image.
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    The coalition, named Protect Neighborhood Restaurants, points toward a statewide poll showing fewer than one-third of Californians support the law.

    California-based restaurants are hoping to stop implementation of the state's new fast-food wages law by putting it in the hands of voters. 

    Recently, a group of restaurateurs, franchisees, workers, consumers, and community organizations formed Protect Neighborhood Restaurants, a coalition that filed a proposed referendum to end the Fast Act, a piece of legislation that would allow a 10-person panel to regulate fast-food wages in California. If the request for a referendum is approved, the coalition would have fewer than 90 days to gather more than 623,212 signatures, or 5 percent of total votes in the 2018 gubernatorial election. If all signatures are gathered in the appropriate amount of time and pass all checks, the referendum would appear on the 2024 general election ballot. The coalition's efforts are supported by the International Franchise Association and the National Restaurant Association. 

    The group is banking on the fact that a statewide poll showed fewer than one-third of Californians support the law, and that California's Department of Finance opposed its passage. 

    “As a result of backroom politicking, Governor Newsom has signed a lie into law and maligned all of California’s quick service small businesses and local franchisees as bad employers," the coalition said in a statement. "AB 257 never should have been introduced, it never should have passed, and it never should have been signed into law by the Governor. ... It is only right for California’s voters to have a voice before harboring the burden of a bill that has widely been heralded as a massive step in the wrong direction. California’s elected leaders failed in their responsibility to represent the interests of their electorate."

    The Fast Act, signed into law by Gov. Gavin Newsom on Labor Day, gives the statewide panel power to raise minimum wage to as high as $22 per hour next year, and by as much as 3.5 percent every year after. The new law covers fast-food chains that have 100 or more locations nationally. A petition signed by 10,000 fast-food restaurant employees is still needed to approve the creation of the council. 

    The UC Riverside School of Business found that minimum wages set between $22 and $43 would inflate labor costs by 60 percent and increase prices by 20 percent, inciting much concern among restaurant and franchise organizations. 

    “As a McDonald’s franchisee of more than 20 years, I’ve had the opportunity to open doors for thousands of employees and their families by offering competitive wages, benefits, and an inclusive work environment. My people are the backbone of my business and will always come first," Harris Liu, a Sacramento-based franchisee, said in a statement. "But instead of endorsing legislation that benefits all workers, Governor Newsom is creating an unequal playing field that threatens small business owners and communities across the state. Our elected leaders can and must do better.”

    Workers' rights organizations have applauded the legislation. They point toward a study from Harvard and the University of California San Francisco that found fast-food workers are paid 85 cents on the dollar compared to non-fast-food service employees. 

    “We took on the most powerful corporations in the world and won a seat at the table to raise standards across the fast-food industry," Sandro Flores, a Los Angeles-based Carl's Jr. employee and leader in the Fight for $15 and a Union said in a statement. "But instead of sitting at the table and working with us to improve the industry for workers, franchisees and consumers alike, global, billion-dollar corporations are planning to spend hundreds of millions of dollars to prevent us from having a voice on the job."