On January 31, 2022, the California State Assembly passed Assembly Bill (AB) No. 257, the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act), which would potentially provide increased rights to the state’s more than 500,000 fast-food workers. If passed by the California State Senate and signed into law by Governor Gavin Newsom, the FAST Recovery Act would create the Fast Food Sector Council within the California Department of Industrial Relations (DIR) and add new statutory requirements aimed at holding fast-food franchisors liable for certain actions of its franchisees.
Under the proposed law, the Fast Food Sector Council would establish specific new minimum standards on wages, maximum working hours, and working conditions related to the health, safety, and welfare of fast-food restaurant workers at restaurants with at least thirty establishments nationwide. As explained in the bill’s legislative digest, the standards are also intended to supply “the necessary cost of proper living” to the workers. The new wage and hour standards would be enforced by the Division of Labor Standards Enforcement (DLSE), which is already responsible for enforcing various California wage and hour laws. The new minimum health and safety standards would be enforced by the Division of Occupational Safety and Health (Cal/OSHA), which is already responsible for enforcing California workplace safety laws and regulations.
The Fast Food Sector Council would be comprised of eleven members appointed by the governor and legislative leaders, including two representatives of fast-food restaurant employees, two representatives of advocates for fast-food restaurant employees, one representative of fast-food restaurant franchisors, and one representative of fast-food restaurant franchisees. The remaining five representatives would be from California state agencies, including Cal/OSHA, the DLSE, the DIR, and the Department of Public Health. Based on the proposed makeup of the Fast Food Sector Council, only two of the eleven seats would be held by representatives advocating from the employer’s perspective.
The FAST Recovery Act would also institute statutory requirements aimed at expanding fast-food franchisors’ liability for certain acts of its franchisees, including the following:
- A franchisor would be required to ensure that its franchisees comply with a variety of employment, worker, and public health and safety laws and orders, including those related to unfair business practices, employment discrimination, a range of labor regulations, emergency orders, and standards issued by the Fast Food Sector Council.
- A fast-food restaurant franchisor would be jointly and severally liable for certain violations by its franchisee.
- Certain laws would be enforceable against a fast-food restaurant franchisor to the same extent that they would be enforceable against a franchisee.
- A fast-food franchisee would have a private right of action for monetary damages or injunctive relief against a franchisor, if the terms of a franchise agreement prevented or created a substantial barrier for the franchisee to comply with applicable laws, orders, rules, or regulations.
The FAST Recovery Act has not yet passed the California State Senate or been signed into law by the governor. Ogletree Deakins will continue to monitor the bill’s progress and will post updates on the firm’s California blog as additional information becomes available.