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The FAST Act would create a Fast Food Council to help regulate the quick-service industry, including setting wages.

Lawsuit filed to stop California from implementing FAST Act

The Save Local Restaurants Coalition has filed a lawsuit to stop California from implementing Assembly Bill 257 on Jan. 1 because it has collected enough signatures to push it to a referendum vote in 2024.

Update: On Friday, the Sacramento Superior Court issued a temporary hold on AB 257, which prevents the law from being implemented or enforced until the court has the chance to decide the merits of the case. A hearing is scheduled for Jan. 13. 

The Save Local Restaurants coalition released the following statement in response to this decision, which came on the heels of its lawsuit filed Thursday:

“Above all, today’s decision by the Sacramento Superior Court protects the voices of over one million California voters who exercised their democratic right in asking to vote on a piece of legislation before bearing its burden. This process has been preserved for more than 100 years and was in grave risk of being suppressed. While this pause is temporary, the impact is beyond just one piece of legislation and keeps intact for the time being California’s century-old referendum process.”

The Save Local Restaurants Coalition, which includes the National Restaurant Association, U.S. Chamber of Commerce and the International Franchise Association, has filed a lawsuit to stop California from implementing Assembly Bill 257, also known as the FAST Act. The controversial legislation was passed in September and includes the creation of a Fast Food Council to regulate the quick-service industry, including setting wages.

Per an email from California’s Department of Industrial Relations to the coalition’s legal team at Nielsen Merksamer, AB 257 is expected to go into law January 1, 2023, despite the coalition’s collection of enough signatures to send the legislation to a referendum vote in November 2024.  The coalition received more than a million signatures, exceeding the nearly 625,000 signatures required to hold off enactment until a referendum vote. On a press call Thursday afternoon, representatives from the coalition made it clear the lawsuit isn’t about AB 257 specifically – though the coalition was formed in September to challenge the legislation – but rather the referendum process made clear in the state constitution that they believe is being circumvented.

“This is unrelated to the FAST Act … For 100 years, there has been a mechanism in place that allows voters in California to approve or disapprove … We were told in writing this process was going to be ‘set aside’ and they were still going to proceed. This is unprecedented, it’s undemocratic and we can’t stand for it. California voters deserve more,” Sean Kennedy, EVP for Public Affairs at the National Restaurant Association, said during Thursday’s call.

Kurt Oneta, an attorney from Nielsen Merksamer, added that 52 similar referendums have been filed in the past 100 years and none have gone into effect until the referendum process has played out on the ballot.

“This is not an objection to AB 257, it’s an objection to how the state is going about it in a way that’s never been attempted before,” he said. “It may become law someday, but not until voters have a say.”

The lawsuit seeks to stop the FAST Act from going into effect and invalidate efforts to enforce the law until it appears on the ballot.

The lawsuit and potential enactment are likely to catch the attention of many in the restaurant industry and beyond. Since California first announced the legislation, similar proposals have popped up elsewhere.

Glenn Spencer, SVP of Employment Policy at the U.S. Chamber of Commerce, said his organization typically doesn’t get involved in state issues, but made an exception this time because of the potential wider implications it could have.

“Our main concern is that this bill probably doesn’t stay just in California,” he said. “We’re concerned it could spread to other parts of the country and to other industries.”

Contact Alicia Kelso at [email protected]

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