Business Coalition Forms to Overturn California’s FAST Act (AB 257)

Editor’s note: AB 257 was signed into law on September 5, 2022, effective January 1, 2023. However, its passage quickly generated momentum for an electoral referendum to potentially block the new law. If referendum supporters collect enough signatures to qualify for the 2024 ballot, the law cannot be implemented until voters decide, according to an article in the National Law Review.

To appear on the November 2024 ballot, referendum supporters would need to submit approximately 623,000 valid voter signatures by December 4 (90 days from the date the bill becomes law).

The article also notes that two pro-franchise amendments were made in the final version of the bill that passed:

1) “The most significant change in the law was the removal of the joint liability clause, which made each franchisor covered by the law a joint employer and liable for any violations of the labor code committed by its franchisees.”

2) “Before the amendment, the Act also rendered null and inapplicable any agreement providing for a franchisee to indemnify a franchisor for its liability under the Act, as contrary to public order. The August 25 Senate amendments also removed this ban.

Save Local Restaurants wants you to help protect QSRs in California

To date, the newly formed business coalition includes the IFA, the National Restaurant Association and the United States Chamber of Commerce. From the band’s announcement on September 16:

“AB 257 not only harms local California fast food restaurants and franchisees, but also the workers it claims to protect. Proponents of this legislation have indicated that similar efforts are heading to other states and industries. Now is the time to stop this bill before the evil spreads.

“Neighborhood restaurants provide first jobs and lifelong careers, restaurant choice and value for hard-working Californians, and economic opportunity for underrepresented entrepreneurs across the state. Companies targeted by this law already have strict rules in place to protect workers and consumers, but these can now be overridden by a small, unelected committee. This will stifle job growth and drive up prices. California consumers will be forced to pay an estimated 20% increase in food prices at counter-service establishments, which will have the greatest impact on low-income people and communities of color.

“Before these repercussions hit the state, it is only right that California voters have a say in whether they should bear the brunt of rising prices and job losses, as small businesses are forced to limit opportunities, lay off employees, or shut down altogether. With less than a third of Californians supporting AB 257, it’s critical that they have the opportunity to make their voices heard and hold their elected leaders accountable.

1) Matt Haller, IFA President and CEO

“Franchising offers unparalleled opportunities for budding entrepreneurs, workers and the communities they serve. The FAST Act aims to eliminate that while raising prices for Californians at the worst possible time. It’s only right that California voters have a say if they want to face job losses and even higher prices than they already experienced before this bill crushed opportunity.

2) Michelle Korsmo, President and CEO of the National Restaurant Association

“Restaurants are the heart and soul of the communities they serve. They are also the economic engine that sustains the local farmers, families and businesses around them. When a restaurant closes, it affects the whole community. It is important to think about the cause and effect of legislation like the FAST Act. The unchecked board created by the FAST Act will raise prices for consumers, make it harder to afford to bring in the important people who host guests, and the actions of this board could push these small business owners out of business. their doors for good. People shouldn’t consider this to be only quick service restaurants. The damage will extend far beyond quick service restaurants to all service businesses operating in the state and industries that do business with restaurants. We’ve partnered with the International Franchise Association and the United States Chamber of Commerce to co-chair the Save Loal Restaurants Coalition because the stakes are too high for us not to push back against this law.

3) Neil Bradley, Executive Vice President and Chief Policy Officer of the United States Chamber of Commerce

“If AB 257 is upheld, you can be sure it will be the first of many efforts to impose European-style sectoral bargaining on businesses of all kinds with government-created councils dictating how small businesses operate. and the way employees work. The result in each case will be the same as in the restaurant industry: fewer jobs, less choice for consumers and higher prices for families. The Chamber is proud to stand with the International Franchise Association and the National Restaurant Association to co-chair the Save Local Restaurants Coalition and lead efforts to give voters a chance to weigh in on this harmful legislation that is bad for the community. California and bad for America. .”

For more information or to get involved, visit the Save Local Restaurants website or email

Gladys T. Hensley