After recent passage of a new law to create a fast food council within state government, questions are being raised about its impact on power delegation, as well as inflation, with food prices up 11 percent year over year.
In spite of vigorous opposition from the business community, Gov. Gavin Newsom signed AB 257 over Labor Day weekend. A ballot initiative to overturn it is already underway and a legal challenge may address AB 257’s potential conflict with the National Labor Relations Act (NLRA), Scott Witlin, a partner with Barnes & Thornburg LLP, told the Northern California Record.
“You would probably want to do both, because if the courts hold that the law is preempted or an excessive delegation to an unelected body, you could get a court decision a lot faster,” Witlin said.
Witlin noted that in a Delaware Chancery Court case in September, a constitutional question was answered when a judge ruled against a controversial mail-in voting measure, which lawmakers there had said would likely get challenged in court.
It’s not clear how much the Legislature has considered AB 257’s possible preemption by federal law.
“There’s an agenda in Sacramento to do what Sacramento wants to do and to try and figure out a way to make it defensible later on, and hope the state or federal courts will uphold what they will do,” Witlin said.
Witlin, who practices labor and employment litigation, noted that the Fast Food Sector Council law was proposed last year but didn’t make it over the finish line.
A legal challenge under the NLRA would put it in federal court, Witlin said.
“On the grounds that the statute is preempted and hold that the statute can’t be enforced because it intrudes upon an area that Congress has occupied,” Witlin said. “I think there is a very good argument that the Fast Food Council is a labor organization under the National Labor Relations Act.
“And as a result, the Legislature has created a labor organization and vested it with powers that Congress didn’t vest other unions, and for that reason, the Legislature didn’t really have the ability to do what it did in passing this statute.”
The Fast Food Council is actually modeled after an idea that comes out of Europe.
“But the European system of labor unions is very different from what we have in the United States,” Witlin said.
Europe doesn’t have exclusive representation, meaning there may be multiple unions competing for workers in the same company unlike in the U.S. where majority rules.
There are also questions concerning AB 257’s delegation of powers, Witlin said.
“There are limits in the amount of authority the Legislature can delegate away to an unelected body,” Witlin said. “We are still guaranteed in California the right to a representative government of our choosing.”
Because it’s part of the California Labor Code, it also creates the potential for more litigation.
“Not just from the Attorney General, you can have all sorts individual private attorneys general under our Private Attorneys General Act (PAGA) trying to make determinations about who’s covered by the law, and what the law really means, and what the rulings of the Fast Food Council are,” Witlin said.
While it remains unclear how the law will be used by the plaintiffs’ bar and whether it leads to more automation in the fast-food industry, there’s less debate about its negative impact on worsening inflation.
“We certainly haven’t heard the last of it,” Witlin said, adding that with AB 257 now the law, people will likely be organizing for the wage increases envisioned in the statute, while separate localities will also be organizing their own separate fast food councils, also envisioned by the statute.
The localities must have at least 200,000 people, meaning cities from San Francisco to San Diego each could have its own.
“All making proposals about how to regulate the fast-food industry,” Witlin said.