California Restaurant Owners Say They Have Enough Signatures to Block Fast-Food Minimum-Wage Law

A coalition of business groups and California fast-food franchisees says it has collected more than a million signatures in opposition to a new state law that would create an unelected fast-food council to micromanage the industry, could cripple the industry with a drastic increase in its minimum wage, and could send the cost of food soaring.

The Save Local Restaurants coalition announced Monday that organizers began submitting the signatures at the county level in late November. The signatures, which were due Monday, are expected to be transferred to the California secretary of state’s office in the next week or so.

The coalition needs to have collected about 623,000 signatures from registered California voters to put the Fast Food Accountability and Standards Recovery Act, or FAST Act, on the 2024 general election ballot and to block its implementation until voters have had a say.

Matthew Haller, president and CEO of the International Franchise Association, called the FAST Act “one of the single most damaging pieces of legislation for local restaurants and California consumers.” Opponents of the law say it would increase food prices by as much as 20 percent, and it would hurt small fast-food businesses across the state.

“The FAST Act would have an enormous impact on Californians, and clearly voters want a say in whether it should stand,” read a prepared statement from the Save Local Restaurants coalition. The coalition was spearheaded by the International Franchise Association, the U.S. Chamber of Commerce, the National Restaurant Association, and various franchise owners and brands.

The FAST Act – Assembly Bill 257 – was narrowly approved by the California legislature on August 29, and signed into law by Governor Gavin Newsom on Labor Day. The law allows for the creation of a new ten-member, unelected council specifically to micromanage the state’s fast-food industry. It would have broad powers to impose new rules and regulations on thousands of fast-food and counter-service restaurants, including the ability to raise the minimum wage at most of California’s fast-food restaurants next year from $15 an hour to $22 – a nearly 50 percent jump, with cost-of-living adjustments each year. The council’s regulations would apply to any fast-food restaurant that is part of a chain with 100 or more locations.

The Service Employees International Union of California and other proponents of the FAST Act have claimed that it was needed to prevent wage theft and sexual harassment prevalent in fast-food restaurants, and to combat a general lack of compliance with existing regulations.

But business groups in California and nationally say there’s little evidence the problems the law is allegedly designed to cure are worse in the fast-food industry than in others. Instead, they say, the effort is a powerplay by the SEIU and Big Labor, which has struggled for years to organize California’s fast-food industry. Labor leaders could use their significant influence on the council as a bargaining lever with the small business owners who predominantly run the state’s fast-food restaurants.

Opponents of the measure say it will lead owners to reduce hours, raise prices, cut jobs, and increasingly turn to technological replacements. Other industries outside fast food would be pressured to raise their own wages – and likely their prices as well – to compete for workers, worsening already high inflation.

Opponents also see the FAST Act as a union-backed ploy to plant the seed for a form of what is known as sectoral bargaining in the U.S. In sectoral bargaining, which is common in Europe, workers negotiate compensation and working conditions across an industry, not workplace by workplace. That is not legal in the U.S., but the FAST Act comes close, allowing the council – with the SEIU’s help – to dictate workplace standards and minimum-wage rates.

According to the law, to establish the Fast Food Council, at least 10,000 fast-food employees would have to support a petition supporting its creation. The council would include two representatives of franchisors, two representatives of franchisees, two representatives of fast-food employees, two representatives of employee advocates, and one representative each from the state Department of Industrial Relations and the Governor’s Office of Business and Economic Development. The members would be appointed by the governor or by legislative leaders — all Democrats in California. The four business representatives on the council would likely be outvoted on many issues.

In October, the SEIU filed a complaint with California’s secretary of state’s office and with the attorney general’s office alleging that signature-gatherers affiliated with the Save Local Restaurants coalition were “willfully misleading voters” into believing they were signing a petition to increase the minimum wage. The coalition called the complaint “frivolous.”