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Judge Grants Stay on California Fast Food Labor Law AB 257

A Sacramento County Superior Court judge has put a temporary hold on a new California law increasing 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 groups that support an effort to overturn the law, called Assembly Bill 257, through a referendum on the California ballot in November 2024. If the referendum qualifies for the ballot, it would block AB 257 until the voters have a say.

The coalition, called Save Local Restaurants, took issue with the state Department of Industrial Relations̵[ads1]7; efforts to implement AB 257 on Jan. 1, arguing that because the referendum effort is well underway, that makes the law unenforceable. Implementing the law could set a harmful precedent that threatens voters’ right to a referendum, the coalition said.

Erin Mellon, a spokeswoman for Gov. Gavin Newsom’s office, said Thursday that the law would be put into effect while election officials completed the process of verifying the voter signatures necessary to qualify the referendum. However, state officials “will, of course, comply with any court order,” she said in an email.

Also known as the Fast Recovery Act, AB 257 would, among other things, create a workers’ 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 frame given to the court to address this matter,” she wrote. The lawsuit was filed on Thursday and sought an injunction for the next day.

The order prevents the law from being implemented before the court has the opportunity to hear the case and decide whether a preliminary injunction should be granted. A hearing is scheduled for January 13.

The deadline for election authorities to complete a random sample verification of signatures is January 25. The California Secretary of State’s office will decide whether to certify the referendum after verification is complete.

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

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

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

The law requires the signatures of 10,000 fast food restaurant employees to move forward with the creation of the council when the law takes effect.

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

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

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