Restaurant Group Sues to Block California Fast-Food Wage Law

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A restaurant-industry group sued a group of California state officials Thursday, alleging that they plan to illegally begin implementing a new law that would set minimum hourly wages for fast-food workers.

The group, including franchisee and restaurant business associations called Save Local Restaurants, said it filed the lawsuit in California Superior Court after the state’s Department of Industrial Relations informed them that the law would go into effect Jan. 1. 

The restaurant group said in early December that it had submitted a petition with more than one million voter signatures to require Californians to vote on the measure in the 2024 election, a step that would put the law on hold until then. The lawsuit claims that California plans to implement the law until the secretary of state’s office verifies that the restaurant coalition submitted a minimum of about 623,000 valid signatures on its petition, which hasn’t yet occurred.

The restaurant coalition claims the law shouldn’t go into effect while the secretary of state’s office is in the process of verifying the signatures.

Erin Mellon, a spokeswoman for Gov.

Gavin Newsom,

said the state disagrees and intends to move ahead with the law for now.

“Although industry is backing a referendum measure, the secretary of state has not certified that it has enough signatures to qualify for the ballot,” she said in a written statement. “The state has an obligation to implement this important law unless and until that occurs.”

The California law, the first of its kind in the U.S., was signed in September by Mr. Newsom, a Democrat, despite opposition by the fast-food industry. Known as the Fast Recovery Act, it creates a 10-person government-appointed council made up of workers, employers, union representatives and business advocates that would set a minimum wage for the state’s estimated half-million fast-food workers at as high as $22 an hour. That minimum would then increase annually based on inflation. 

Currently California’s minimum wage is $15 an hour, and is set to rise to $15.50 in 2023.

Supporters of the law, including organized labor, said it would give fast-food workers greater say in their pay and working environments in an industry that has proven difficult to unionize because of the large number of franchise owners. 

Business groups have warned that the law could lead restaurant owners to cut staff and raise menu prices to offset the higher wages, as well as avoid opening new locations in California. 

Efforts to block the law have drawn support from restaurant companies including

McDonald’s Corp.


Starbucks Corp.

, Taco Bell parent

Yum Brands Inc.


Chipotle Mexican Grill Inc.,

which donated to the campaign to call a referendum vote repealing it.

—Zusha Elinson contributed to this article.

Write to Jacob Bunge at [email protected] and Ben Fritz at [email protected]

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Appeared in the December 30, 2022, print edition as ‘California Fast-Food Wage Law Challenged.’

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