On Labor Day, California Gov. Gavin Newsom signed the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act), which authorized the California Department of Industrial Relations to create a Fast Food Council with the authority to set standards for wages, safety conditions, security, training, time off, and even protection from harassment and discrimination. We wrote all about it in this Alert.

But the franchise and restaurant industry acted quickly. The day after the FAST Recovery Act was signed into law, a referendum effort was launched in a bid to stay the law. Now, the Save Local Restaurants Coalition, a coalition of restaurant owners and operators, has collected enough signatures to qualify FAST Recovery Act for the November 2024 ballot. Once the California Secretary of State verifies that the requisite number of signatures has been collected, the implementation of the law will be stayed until California voters have the opportunity to decide the fate of FAST Recovery Act in November 2024.

Fast Food restaurant franchisors and franchisees can rejoice for the holidays; at least for now, there is not a lump of coal in their stockings.

Update: On December 27, 2022, the Department of Industrial Relations indicted an intent to implement AB 257 despite the referendum effort, noting if and when the referendum qualifies for the ballot, it would then be put on hold. In response, on December 29, 2022, Save Local Restaurants Coalition filed a lawsuit against the state, seeking to ensure the law was stayed until the referendum effort was completed. On December 30, 2022 a California County Superior Court judge sided with the restaurant group, and issued a temporary restraining order blocking the implementation of AB 257. The matter was set for a full hearing on January 13, 2023.

For now, the FAST Recovery Act remains on pause. Fox Rothschild is continuing to monitor these developments regarding the FAST Recovery Act

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