January 2023: California’s FAST Act on Hold for Now

Update Applicable to:
All employers of fast-food restaurants with 100 or more establishments nationwide in California

What happened?
In our previous communication here, we notified you that Governor Newsom passed Assembly Bill 257 (AB 257), titled the “Fast Food Accountability and Standards Recovery Act,” or the “FAST Recovery Act.”, into law. This is an update to that communication.

What are the details?
AB 257 proposes establishing a Fast-Food Sector Council to regulate California’s fast-food restaurants. Governor Newsom signed the law on September 5, 2022. However, the following day, a coalition opposing the law started the process of a referendum on the Act. On December 5, 2022, the coalition submitted over one million signatures in support of the referendum to qualify for the November 2024 ballot. 

Despite the signatures being submitted to the state, the Department of Industrial Relations said on December 27, 2022, that it would continue to implement and enforce the law on January 1, 2023. The coalition challenging the law filed a lawsuit seeking to stop law enforcement while the signature verification process was underway. 

On January 13, 2023, the Superior Court of Sacramento held that the state could not enforce the law while the referendum process was underway. The court found “there is very little harm” to the state and the public in staying the implementation of AB 257 until the signature verification process is completed. The court explained, “The harm to California citizens and electors, in contrast, is great given the Court’s duty to ‘jealously guard’ the people’s right to referendum and the confusion that would occur if AB 257 were temporarily implemented while signatures were verified, and the confusion and uncertainty that could occur if the provisions of [AB 257] were to go into temporary effect.”

As noted by the court, the verification process of the signatures in support of the referendum is estimated to take between January 27, 2023, and March 13, 2023. The court’s injunction will remain in place until:

1. The county elections officers and the Secretary of State determined that the referendum petition failed to contain sufficient valid signatures to qualify for the ballot or
2. If the referendum qualifies for the ballot, AB 257 is approved by most California voters at an election (November 2024).

A copy of the court’s order can be read here.

For more information, please see the links below:

Assembly Bill 257 (AB 257)

Fast Food Accountability and Standards Recovery Act (FAST ACT) 

Previous Vensure Communication (9/14/2022)

Court Order

Article 1 – Article 2

What do employers need to do?
Employers should review the links provided above and be on the lookout for any updates regarding the FAST Act in the coming future. Vensure will continue to provide more updates once more news has been received.