Judge halts California fast-food law as restaurants, unions hammer each other

A Sacramento Superior Court judge ruled on Friday to block a California bill that would give the state the power to negotiate wages and working conditions for fast-food workers.

The bloc depends on the outcome of a proposed referendum pushed by fast food giants to override the proposed changes.

The Fast Food Accountability and Standards Recovery Act (“FAST”) has seen a major pushback from restaurant owners and franchisees as labor unions fight to give the state a seat at the wage bargaining table.

FAST-FOOD FRANCHISEES SAY CALIFORNIA’S AB 257 COULD INCREASE COSTS AND HARM THE BUSINESS MODEL

A sign is displayed outside a McDonald’s restaurant on April 28, 2022 in San Leandro, California. (Justin Sullivan/Getty Images/Getty Images)

The law would establish a 10-member board capable of setting minimum wages and working hour parameters at fast food restaurants across the state.

Teleprinter Security Last Change Change %
MCD MCDONALD’S CORP. 263.53 -2.40 -0.90%
GCM CHIPOTLE MEXICAN GRILL INC. 1,387.49 -17.46 -1.24%

Restaurant industry interest groups are calling for a referendum in November 2024 to kill the legislation.

MCDONALD’S USA PRESIDENT JOE ERLINGER CRITICIZES CALIFORNIA FAST-FOOD WORKER BILL

Governor Gavin Newsom

California Governor Gavin Newsom angrily denounced the U.S. Supreme Court’s decision to overturn Roe v. Wade, at a press conference in Sacramento, Calif. on Friday, June 24, 2022. (AP Photo/Rich Pedroncelli/AP Newsroom)

Election officials have not yet finished counting signatures on the referendum proposal, but if enough is counted, the court’s decision will block the law from taking effect until Californians can intervene.

The California Department of Industrial Relations will begin implementing the law on Sunday pending a successful reform petition. However, actual wage negotiations are unlikely to begin until late next year.

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The Service Employees International Union was a key champion of legislation.

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The union has accused McDonald’s, Chipotle and other chains by name of disregarding worker welfare for business reasons.

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