Restaurant group lawsuit halts California's Jan. 1 fast food bill

A group won a temporary restraining order to stop California's plan to implement a law on Jan. 1 that could, among other things, raise the industry’s minimum wage to $22 per hour. 

Save Local Restaurants filed a lawsuit on Thursday saying California couldn't enact AB 257, or the FAST Act, also known as Fast Food Recovery Act, as planned after the group on Dec. 5 submitted a petition signed by more than 1 million Californians to put the measure on the ballot in November 2024.  Save Local Restaurants includes International Franchise Association, the National Restaurant Association, and the U.S. Chamber of Commerce. 

The law would give an appointed 10-member state council, or “Fast Food Council,” wide-ranging authority over fast food and fast casual restaurants in California with more than 100 locations nationwide.  The council could raise the minimum wage to $22 per hour in 2023 and up to 3.5% annually after that. It could also set minimum standards for working conditions, maximum hours worked, security, and more. 

Normally, a petition for referendum would put the law on hold but earlier this week, the California Department of Industrial Relations (DIR) said it would implement the law as planned. DIR said the law should only be put on hold once the petition signatures are verified and the ballot referendum is formally approved, which could take weeks. 

“Since the inception of the right of referendum over a century ago, approximately 52 referendum measures have made it on to the statewide ballot, over 50% of which ended up repealed by voters,” said Nielsen Merksamer attorney Kurt Oneto, who helped file the lawsuit, in a statement. “Not in a single one of those prior instances did the State ever attempt to temporarily enforce the referred statute while the signature review process was underway.”