Judge puts hold on California law that could have raised fast-food worker wages

A Sacramento County Superior Court judge has put a temporary hold on a new California law boosting protections for fast-food workers that was set to go into effect Jan. 1.

The order comes in response to a lawsuit filed Thursday by a coalition of major restaurant and business trade groups that is backing an effort to overturn the law, called AB 257, through a referendum on the California ballot in November 2024. If the referendum qualifies for the ballot, it would block AB 257 until voters have a say.

The coalition, called Save Local Restaurants, took issue with the state Department of Industrial Relations’ effort to implement AB 257 on Jan. 1, arguing that because the referendum effort is well underway, it renders the law unenforceable. Implementing the law could set a harmful precedent that threatens voters’ right of referendum, the coalition said.

A spokesperson with Gov. Gavin Newsom’s office had said Thursday that the law would be put into effect while election authorities completed the process of verifying voter signatures necessary to qualify the referendum. However, state officials “will, of course, abide by any court order,” Erin Mellon, the spokesperson, had said in email.

Also known as the FAST Recovery Act, AB 257 would, among other things, create a worker representative body with the power to raise wages.

The temporary restraining order was issued by Sacramento County Superior Court Judge Shelleyanne W.L. Chang “in light of the incredibly short time frame provided to the Court to hear this matter,” she wrote. The lawsuit was filed Thursday and sought an injunction for the next day.

The order prevents the law from being implemented until the court has a chance to hear the case and decide whether to grant a preliminary injunction. A hearing is scheduled for Jan. 13.

The deadline for election authorities to complete a random sample verification of signatures is Jan. 25. The California secretary of state’s office will decide whether to certify the referendum after verification is completed.

Save Local Restaurants submitted slightly more than 1 million unverified signatures this month, well above the required minimum, making it likely the referendum will be certified for the ballot.

AB 257, which was signed by Newsom on Labor Day, was the focus of intense lobbying by labor, restaurant and business groups. Fast-food corporations and franchisees argued it unfairly singled out their industry, would burden operations with higher labor costs and would cause food prices to soar.

The landmark law creates a mandate for a first-of-its-kind council to set standards for franchise restaurant workers’ hours and other workplace conditions. It also could raise the workers’ minimum wage as high as $22 an hour.

The law requires the signatures of 10,000 fast-food restaurant employees to move forward with creation of the council once the law goes into effect.

Service Employees International Union California, which sponsored AB 257 and opposes the effort to overturn it, said it has submitted nearly double the number of signatures required by the statute to establish the Fast Food Council.

After AB 257 became law, labor advocates who sponsored the legislation alleged that signatures supporting the referendum were obtained fraudulently. The referendum proponents called the complaint, filed both with California’s secretary of state and its attorney general’s office, “frivolous.”