Judge grants stay of California fast food worker law AB 257

A Sacramento County Superior Court judge has temporarily suspended a new California law strengthening protections for fast-food workers that was set to take effect Jan. 1.

The order follows a lawsuit filed Thursday by a coalition of major restaurant and commerce groups that backs 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 stall AB 257 until voters have their say.

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

A spokesman for Gov. Gavin Newsom’s office said Thursday the law would be put into effect while election officials complete the process of verifying voter signatures needed to qualify the referendum. However, state officials “will, of course, comply with any court order,” Erin Mellon, the spokeswoman, said in an 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 WL Chang “in light of the incredibly short time given to the Court to hear this case,” she wrote. The lawsuit was filed Thursday and sought an injunction for the next day.

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

The deadline for election officials to perform a random signature check is January 25. The California Secretary of State’s office will decide whether or not to certify the referendum once verification is complete.

Save Local Restaurants submitted just over a million unverified signatures this month, well above the minimum required, making it likely that the referendum will be certified for the ballot.

AB 257, which was signed by Newsom on Labor Day, has been the subject of intense lobbying from labor groups, restaurants and businesses. Fast food companies and franchisees have argued that this unfairly singles out their industry, burdens operations with higher labor costs and drives food prices higher.

The landmark law creates a mandate for a one-of-a-kind board to set standards for franchise restaurant employee hours and other working conditions. It could also raise the minimum wage for workers up to $22 an hour.

The law requires the signature of 10,000 fast food workers to go ahead with the creation of the council once the law takes effect.

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

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