Heading into 2022 and a third year of the COVID-19 pandemic, California legislators face a predicament: how to support small-business owners who have faced the pandemic’s crushing challenges while continuing to lead the nation with innovative policies that protect and empower essential workers.
One piece of legislation, Assembly Bill 257 – the Fast Food Accountability and Standards Recovery Act, or FAST Recovery Act – gives state legislators the opportunity to answer the needs of these two important constituencies.
There are more than 557,000 fast food workers across the state in more than 30,000 locations. The industry stands out not only because of its size, but also its well-documented labor violations.
The FAST Recovery Act, introduced by former Assemblymember Lorena Gonzalez, creates a structure to improve compliance with the law in an industry structured to avoid corporate accountability. It would create a Fast Food Sector Council composed of representatives of franchisor brands, franchisee operators and workers, as well as public health and labor agencies.
The council will be empowered to develop labor, safety and health standards for the fast food industry based on the expertise of public agencies, workers in the industry, franchisees and franchisors.
This addresses an inherent power imbalance in which franchisees and frontline workers are at the mercy of global fast food corporations.
In fast food, major brands like McDonald’s franchise their operations by contracting with small-business people to operate restaurants. These brand-name corporations control the products, prices and most of the restaurants’ operations.
The franchisees who operate the restaurants often have no way to make a profit while meeting the corporate directives about opening hours and customer service other than by cutting labor costs. In fact, in the past few years, Black franchisees have brought racial discrimination lawsuits against McDonald’s alleging the burger giant blocked them from the best and most profitable locations.
With tight profit margins and little ability to make improvements independently, many operators fail to pay legal minimum wages or overtime, deny sick leave and ignore harassment, safety hazards and disease transmission.
The FAST Recovery Act ensures shared responsibility between franchisors and franchisees for legal compliance by making franchisors jointly liable for franchisees’ standards violations, as well as employment and health and safety laws.
With AB 257, a franchisee would be able to sue a franchisor if corporate policies impede compliance with the council’s minimum standards. Studies show that it is the franchising relationship – not the nature of restaurant work generally or fast food work in particular – that accounts for the noncompliance with labor standards.
The COVID-19 pandemic has illuminated the tragic consequences of fast food’s high-violation, low-accountability model. Medical researchers at the University of California, San Francisco found that line cooks faced a 60% increase in mortality associated with the pandemic – the highest of any occupation – and Latino food service workers saw a 59% increase in mortality.
Although the council is an innovative solution to problems in the fast food industry, it is based in well-settled principles of law. It is akin to existing appointed bodies, such as the California Energy Commission and California Coastal Commission, that are designed to tackle difficult issues and ensure input from stakeholders.
AB 257 adopts this well-established participatory model of regulation that has been used effectively for decades and would strengthen opportunities for public input by bringing key stakeholders into the regulatory process.
But, passing the FAST Recovery Act is not just a matter of good policy, it is good politics for lawmakers – a recent poll by Data for Progress found that 74% of voters support AB 257, including a majority of Democrats, independents and Republicans. The same poll found that a majority of voters believe fast food workers, who in California are 80% people of color, should have more power to negotiate with their employer. The passage of the act would be a win for workers, small-business owners and legislators alike.
Catherine L. Fisk is a professor of labor and employment law at the UC Berkeley Law School.
