What’s next in the struggle to halt California’s new wage law

The industry's Hail Mary is using the 2024 ballot to enlist voters in the cause. Meanwhile, nine states are emerging as future battlegrounds.

The chances of scrapping a controversial new process for setting the wages and working conditions of California’s fast-food industry will depend on how readily quick-service employers can enlist the public in the cause, according to two longtime veterans of the political scene.

In a new edition of their Working Lunch podcast, Align Public Strategies principals Joe Kefauver and Franklin Coley explain that representatives of California’s quick-service business will need to collect the signatures of at least 600,000 residents just to clear the first hurdle. And they need to do it by Dec. 4.

A coalition representing quick-service brands operating in the state intend to gather a statement of opposition from 1 million citizens to play it safe, at a likely cost exceeding $10 million, Kefauver noted.

If the Save Local Restaurants coalition is successful, a referendum on the recently passed Fast Act would be put on the 2024 ballot. Under one of the quirks in California law, the Fast Act would not take effect until then.

“Even if it’s a two-year delaying tactic, a lot of people will save a lot of money,” Kefauver said during the podcast. 

The Fast Act specifies that the wage-setting council it requires to be formed could raise the minimum wage for employees of big fast-food brands in the state to $22 an hour, a 50% increase, in 2023. The pay floor could rise by as much as 3.5% for each of the following five years, until the Fast Act sunsets. 

Forty percent of the seats on the council will be held by fast-food employees and union representatives, with franchisors and franchisees also holding four of the body’s 10 seats. The last two positions will be occupied by state officials. All would be appointed by the state rather than be elected.

The coalition could also opt to push for a ballot initiative, which California differentiates from a ballot referendum. In the latter, state officials draft the language that’s presented to voters on the actual ballot, according to Coley.

With an initiative, proponents of putting the question before voters are empowered to write the language. But trying to overturn the Fast Act through an initiative would require that the law be put in force first, said Coley.

Getting an initiative on California’s ballot would likely be considerably more expensive—“probably a couple hundred million,” Coley said.

The irony is that ballot referenda and initiatives are typically used by unions and other powerful advocacy groups whose agendas often clash with the restaurant industry’s.

“It’s not something we do very often in the restaurant industry, play in the California initiative game,” said Kefauver.

“It brings a tear to my eye to see our industry step up and play with the big boys and girls,” joked Coley.

They stressed during the podcast that what happens in California could have repercussions in much of the country. The Align duo mentioned nine states where the political climate and strength of the Democratic Party make the introduction of a Fast Act-like bill possible: Washington, Oregon, Illinois, New York, Connecticut, New Jersey, Nevada, Colorado and Hawaii.

“I’m a little nervous about using the same strategy we used in California,” said Kefauver, referring to the industry’s efforts to thwart the Fast Act. He noted that few states have as many chains headquartered locally as California does. The state also has more fast-food restaurants by far than any other state boasts.

“We should have gotten a better outcome in California,” said Coley, though he specified that the shortcomings weren’t the fault of industry associations and leaders. Rank-and-file operators just didn’t seem to be roused by the legislative battle, while unions were markedly aggressive in their lobbying efforts.

“Clearly we didn’t do a good enough job,” Coley said. But “we learned what we do well, and we learned what we do not do well.”

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