Proposal could alter liability of fast food companies
Fast food corporations would be liable for any health and safety violations of their California franchisees under proposed legislation.
Assembly Bill 1228, sponsored by Assemblyman Chris Holden, D-Pasadena, is the latest step in a campaign by fast food workers and their advocates to improve conditions across the industry, which employs about 500,000 people statewide.
Last year, Gov. Gavin Newsom signed AB 257 to create a state-backed labor council to set pay and working conditions for the industry. One day after the signing, opponents filed a referendum to halt the formation of the council. The measure qualified for the 2024 ballot last month.
An earlier version of AB 257 included language that made national companies jointly held liable for labor law violations of their franchisees.
A franchisee is an independent owner who invests money to operate an outlet of a retail chain. The business model, commonly used by the fast food industry, allows for the owner and company to share in the operations and profits. Currently, fast food companies are not legally responsible for any labor violations if individual stores are owned by franchisees.
Holden, who also authored AB 257, said the latest bill will protect workers and support local businesses by “ending corporations' ability to exploit the franchise system.” It would apply to any fast-food chain with at least 100 locations nationwide. “As a former fast-food franchisee, I know how much pressure maintaining a safe and healthy working environment puts on local owner-operators, especially when global corporations refuse to contribute their share,” Holden said in a statement.
Advocates argue that the current franchise model protects companies from legal and financial liability and leaves independent owners to fend for themselves. They say that sys
tem leads to increased wage theft, harassment, discrimination and other violations of employment law.
“Just like they (fast food corporations) set menu prices and the design of a restaurant, it's time they ensure we have living wages and safe work environments,” said Maria Hernandez, a Sacramento Jack in the Box worker.
Similar legislation was introduced last month in New York. Earlier this week, Sen. Monique Limón, DSanta Barbara, also introduced Senate Bill 476 to ensure employers cover the cost of food safety training.
The bills represent a larger movement by labor groups, like Service Employees International Union, to empower low-income workers who are often people of color. SEIU led a campaign in 2016 to push California to raise its minimum wage to $15.
“From coast to coast, workers are fighting back against the exploitative, race-to-the-bottom system that defines the fast-food industry and perpetuates cycles of poverty in Black and Brown communities,” SEIU President Mary Kay Henry said.
AB 1228 likely will face resistance from the same alliance of restaurant interests that have fought AB 257. Among those in opposition of last year's fast food bill were the California Restaurant Association and the International Franchise Association. They contend California's current workplace regulations already protect fast-food employees and result in fewer violations.
The Employment Policies Institute, a conservative nonprofit think tank, released a study last August analyzing nearly a decade of California Department of Industrial Relations labor law violations. The data showed fewer wage claims in fast-food restaurants compared to other industries.