Executive Summary
The California Senate Labor, Public Employment and Retirement Committee has voted to pass and amend AB257. The amendments remain focused on the powers of the new Fast Food Sector Council but the Committee added additional clauses incentivizing collective bargaining. The bill now moves to the Judiciary Committee.
Analysis
On June 13, 2022, the California Senate Labor, Public Employment and Retirement Committee voted to pass and amend AB257 by a vote of 3 ayes to 2 noes. While the amendments have not been finalized, they appear to relate to providing the Secretary of Labor and Workforce Development with certain supervisorial power over the Fast Food Sector Council and carving out those businesses and employees who have a collective bargaining agreement. After the amendment is final, the bill will move to the Judiciary Committee.
Looking Forward
Without explicitly saying so, the California Senate Labor, Public Employment and Retirement Committee–like the California Assembly–has once again demonstrated that there are concerns about the power and legality of the Fast Food Sector Council. Various amendments have now been made to the bill to state that the Council cannot usurp the power of the legislative bodies, that they must report to the legislative bodies, and, now, that the Secretary of Labor and Workforce Development will have some form of supervisorial power over the committee. While these actions speciously alleviate concerns, the reality remains that the Fast Food Sector Council will be a pseudo-legislative body with power that goes beyond the bounds of California law.
With that in mind, what is perhaps more concerning is that there has been little to no discussion about amending AB257 to remove the joint-employer provisions in the bill. Instead, and like AB5, the legislature has begun adding provisions to AB257 that incentivize collective bargaining.
At this late stage in the legislation, it appears more and more likely that AB257 will pass by the close of this year and some form of the Fast Food Sector Council will be a part of the bill when that occurs. As a result, the two most pressing fights for the franchise industry for this bill will be (i) whether the franchise industry will have fair representation on the Council and (ii) whether the joint employer liability provisions will remain in the bill. Stay tuned.
This article was originally published on the California Franchise Network.
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Thomas O’Connell – Tom O’Connell is a Shareholder at Buchalter APC, where he serves as Chair of the firm’s Franchise Law Practice and Chair of Litigation for the firm’s San Diego office.
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