December 29, 2022

Save Local Restaurants Coalition Files Lawsuit to Prevent California’s Officials from Violating the State’s Constitution

IFA-led group fights to ensure voters’ voices will be heard during unprecedented attack on the over 100-year referendum process afforded to the people of the state

SACRAMENTO – Today, the Save Local Restaurants coalition, led by the International Franchise Association, the National Restaurant Association, and the U.S. Chamber of Commerce, filed a lawsuit to ensure California’s direct democracy process is respected. The state’s Constitution dictates that, as part of the referendum process, laws cannot go into effect until voters have an opportunity to exercise their voice and vote on the proposed legislation. On December 5, 2022, the coalition announced more than one million California voters have asked for the opportunity to do exactly that with AB 257, or the FAST Act.

This week, the California Department of Industrial Relations (DIR), stated it intends to implement AB 257 on January 1, 2023. Any attempt to temporarily enforce AB 257 after a referendum petition has been filed against it circumvents existing case law and fails to acknowledge the voices of the more than one million voters signed the petition asking AB 257 to be put on hold until it is approved by the statewide electorate.

International Franchise Association President and CEO Matt Haller said: “California bureaucrats, at the behest of special interests, are taking an unprecedented step to violate their Constitution and the will of more than one million voters who asked for the Fast Food Council to be stopped via the referendum process. Californians know the cost of living is already too high, and creating a new government bureaucracy isn’t going to solve a problem the state’s own data shows didn’t need to be solved in the first place, but will simply lead to higher prices on food and additional government overreach into their daily lives.”

The Save Local Restaurants Coalition said: “Over one million Californians have made clear they want their say on this flawed measure, which would raise food prices and cost their communities needed jobs. The Save Local Restaurants coalition will not stop working to protect the small business franchisees, restaurant operators, workers, and customers of these community establishments despite this attack on the rights of California voters.”

Nielsen Merksamer attorney Kurt Oneto said: “Since the inception of the right of referendum over a century ago, approximately 52 referendum measures have made it on to the statewide ballot, over 50% of which ended up repealed by voters. Not in a single one of those prior instances did the State ever attempt to temporarily enforce the referred statute while the signature review process was underway. By moving forward with implementing AB 257, the state would create a harmful precedent that would effectively render the state’s referendum process meaningless.”

The FAST Act creates an unelected Fast Food Council to control labor policy for quick service restaurants, will cause food prices to increase by as much as 20% during a period of decades-high inflation, and will harm thousands of small family-, minority-, and women- business owners across the state. Less than one-third of Californians support the measure, and the state’s own Department of Finance opposed the bill, saying it would create a “fragmented regulatory and legal environment for employers and raise long-term costs across industries.”

Read the lawsuit here.

Additional Information:

On December 5, the Save Local Restaurants coalition announced it submitted to county elections officials over one million signatures from Californians in order to prevent AB 257 from taking effect until voters have their say on the November 2024 ballot.

The Secretary of State issued a notice on December 9, 2022, stating the referendum petition filed against AB 257 contains more than the minimum number of required signatures. Pursuant to Article II of the California Constitution, and consistent with the position taken by the Secretary of State and Attorney General in 2020, AB 257 became ineffective and unenforceable in its entirety as of this date. This includes, but is not limited to, the establishment of the Fast Food Council. Given the refusal by California’s Department of Industrial Relations to commit to upholding this law, the Save Local Restaurants coalition filed a lawsuit against the state officials responsible for overseeing enforcement of AB 257.

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