Judge Issues Order Stopping the DIR From Implementing Fast Food Act

Last Labor Day, Gavin Newsom signed the Fast Food Standards and Accountability Recovery Act, giving the state’s 550,000 fast food workers a seat at the table and bargaining power.

The Act created a government panel that would set hourly wages for fast-food workers of up to $22 beginning this year and establish workplace standards. The wages can increase annually by the same as the consumer-price index, up to a maximum of 3.5%.

This new law established the Fast Food Council within the Department of Industrial Relations until January 1, 2029. It is composed of 10 members to be appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe its powers.

In response to this Act, California small business owners, restaurateurs, franchisees, employees, consumers, and community-based organizations announced the formation of a coalition to refer the FAST Act back to voters and suspend its implementation until they have a say in November 2024. The coalition’s effort is co-chaired jointly by the National Restaurant Association, the U.S. Chamber of Commerce and the International Franchise Association.

The group claimed that the FAST Act would drastically increase food prices by as much as 20% and create a massive new government bureaucracy to regulate locally-owned restaurants.

On December 5, the Save Local Restaurants coalition announced it submitted to county elections officials over one million signatures from Californians in order to prevent AB 257 from taking effect until voters have their say on the November 2024 ballot.

However, Katrina S. Hagen Director, California Department of Industrial Relations, sent the coalition a letter on December 27, 2022 stating that it intends to implement AB 257 – the FAST Act – on January 1, 2023. But “If and when the referendum challenging AB 257 qualifies for the ballot, the law will be put on hold. But in the absence of clear authority providing that AB 257 is suspended merely upon submission of unverified signatures, DIR has an obligation to proceed with implementing the duly enacted statute.”

The Local Restaurants coalition therefore filed a lawsuit on December 29, 2022, claiming that the state’s Constitution dictates that, as part of the referendum process, laws cannot go into effect until voters have an opportunity to exercise their voice and vote on the proposed legislation.

According to a Minute Order in the case dated December 30, 2022 Sacramento County Superior Court Judge Shelleyanne W.L. Chang wrote “The Court is in receipt of the “Memorandum of Points and Authorities in support of Verified Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief’ and supporting documentation filed by Petitioners in this matter on December 29, 2022, seeking relief effective December 30, 2022 in connection with a statewide election matter. In light of the incredibly short timeframe provided to the Court to hear this matter, the Court has construed the filing as an ex parte application for a temporary restraining order, which the Court hereby GRANTS. Respondents are temporarily restrained from implementing, enforcing, or taking any other action to effectuate Assembly B,i11257, Stats. 2022, ch. 246.”

The matter is set for an Order to Show Cause re: Preliminary Injunction on January 13, 2023 at 1:30 p.m. in Department 21.

The Superior Court case is Save Local Restaurants vs. Katie Hagen, in her official capacity as Director of the California Department of Industrial Relations – case number 34-2022·80004062-CU-WM-GDS.

Judge Issues Order Stopping the DIR From Implementing Fast Food Act

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