California Court Freezes Controversial Fast Food Minimum Wage Law

A California court froze a law that would create a board permitted to increase minimum wages received by fast food workers until signatures against the measure can be counted.

The Fast Food Accountability and Standards Recovery Act, also known as the FAST Recovery Act, would establish a “Fast Food Council” responsible for drafting “sectorwide minimum standards on wages, working hours, and other working conditions,” according to a summary of the legislation. After granting a temporary hold on the law, the Sacramento Superior Court agreed to bar enforcement of the measure until petition signatures are examined.

“Today’s Court decision protects the rights of over one million California voters who demanded their say on this law before bearing its burden,” Save Local Restaurants, which has collected more than one million signatures to place the FAST Recovery Act on statewide ballots in the 2024 election, said in a statement. “We appreciate the Court upholding the state’s 100-year-old referendum process as well as the well-established legal precedent that ensures California voters are able to consider the laws passed by their legislature.”

The legislation would only apply to restaurant chains with 100 or more locations across the United States, though a carveout exists for franchises operating a bakery that “produces for sale bread as a stand-alone menu item.” Members of the Fast Food Council created by the legislation would be permitted to raise minimum wages to $22 per hour, representing an increase of over 40% from the $15.50 minimum wage in California.

Governor Gavin Newsom (D-CA), who signed the legislation last year, would be permitted to appoint eight of the 10 members of the Fast Food Council. The law was supported by the powerful Service Employees International Union, which asserts that the statute will “increase corporate accountability” across the industry.

A poll of labor economists by the Employment Policies Institute, a fiscally conservative think tank, found that 83% oppose the FAST Recovery Act; another survey from the International Franchise Association revealed that a mere 32% of Californians support the law. “All signs are telling legislators to reject this bill,” International Franchise Association CEO Matt Haller said in a statement. “Voters don’t want it, consumers don’t want higher prices, and franchisees don’t want corporations being forced to take over their businesses.”

McDonald’s USA President Joe Erlinger, another opponent of the bill, previously contended that the law arbitrarily imposes “higher costs on one type of restaurant, while sparing another” and said that “backroom politicking” could demystify the carveout for restaurants with a bakery. “If you are a small business owner running two restaurants that are part of a national chain, like McDonald’s, you can be targeted by the bill,” he wrote in a letter denouncing the bill. “But if you own 20 restaurants that are not part of a large chain, the bill does not apply to you.”

Legal battles over the FAST Recovery Act occur after some 30% of California restaurants permanently closed their doors as a result of the lockdown-induced recession, according to data from the California State Senate. Newsom led one of the most severe lockdown regimes in the nation three years ago and only recently reversed many of his emergency orders.

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