A dramatic change to fast-food worker protection could upend the franchise framework, and while labor advocates are happy to see it advance, franchise owners aren’t entirely onboard.
State assemblymembers voted 43-13 on Thursday to approve amendments to Assembly Bill 257, the Fast Food Accountability and Standards Recovery Act (FAST). The bill envisions a state-appointed council to create standards for the fast-food industry, ranging from working conditions to wages. It would also make corporations jointly liable with their franchisees to comply with the law.
The bill was introduced last year by former Assemblymember Lorena Gonzalez, but failed to pass by three votes. An amended version of the bill was reintroduced earlier this week by Assemblymembers Chris Holden, Wendy Carrillo, Luz Rivas and Evan Low. Low, who represents part of Silicon Valley, did not respond to requests for comment. The state Assembly must vote on the bill by Jan. 31 to move it to the state Senate.
Assemblymember Ash Kalra, who represents East San Jose, told San José Spotlight he supports the idea of improving legal compliance in the fast-food industry and giving workers a voice.
“This ensures workers and employers work together with state agencies to raise overall standards and protections within the industry,” Kalra said. He added the amendments did not substantially change the original bill.
Workers in dire need
AB 257 received significant backing from labor groups across the state, including the powerful Service Employees International Union (SEIU). Earlier this month, SEIU 1021 members rallied in Sacramento to urge legislators to shield workers from abuse.
“These frontline workers, mostly Black and Brown women, are regularly assaulted, robbed, spat on, yelled at, sworn at and told to go back to ‘their country,’” SEIU 1021 Vice President of Organizing Jennifer Esteen said in a statement.
Many business groups are staunchly opposed to the state legislation. Mark Turner, president/CEO of the Gilroy Chamber of Commerce, told San José Spotlight he’s concerned the state-appointed council could require businesses to pay higher wages beyond approved minimum standards, which may force employers to reduce work staff, cut hours or invest in technology that replaces workers.
Larry Tripplett, owner of three McDonald’s franchises in Santa Clara County, told San José Spotlight he’s already struggling with numerous challenges due to the COVID-19 pandemic.
“It’s really been a strain because so many (employees) are catching COVID, so staffing is difficult,” Triplett said. “Then when you come up with other bureaucratic procedures like AB 257, it just adds to the difficulty of running a small business.”
Recent research suggests fast-food workers have been laboring in dire conditions during the pandemic. A report on Los Angeles fast-food workers from UCLA Labor Center found more than half of surveyed workers experienced negative interactions with customers or co-workers over COVID-19 safety protocols, including verbal abuse and physical assaults. Nearly a quarter reported testing positive, and only 47% said they were allowed paid sick leave if they or a co-worker contracted the virus.
Locally, a Burger King worker in San Jose filed a complaint last year with the Division of Occupational Safety and Health (Cal/OSHA) alleging her employer failed to protect her from heat illness—a common problem in restaurants and other industries such as agriculture.
“There are egregious problems in the fast-food industry,” Ruth Silver-Taube, a labor lawyer and coordinator for the Santa Clara County Wage Theft Coalition, told San José Spotlight, noting wage theft, sexual harassment and workplace violence are widespread.
Silver-Taube said unionization would potentially help ameliorate some of these problems, but it’s difficult to set up unions across many small workplaces owned by different franchisees. This is why she sees it as imperative to set up a council that can create mandatory standards.
“It’s really the only way to effectively eradicate these problems,” she said, noting Santa Clara County recently created a Food Retail Advisory Council that will make recommendations on similar labor issues locally.
Concerns for business
A common argument advanced by groups like the International Franchise Association is that AB 257 will take away opportunities from small entrepreneurs and disproportionately harm people of color.
Sean Kali-rai, co-founder of the Silicon Valley Restaurant Association, told San José Spotlight restaurants and small businesses are where many minorities and immigrants can find upward mobility.
“Franchises are places where mom and pop enterprises find refuge and seek economic freedom from the big business and corporate America,” Kali-rai said in a statement. “The unintended consequences of AB 257 would push away opportunities from budding entrepreneurs and small business owners. To limit or destroy small business franchises is un-American.”
Some labor experts say the claim about AB 257 reducing job opportunities is false.
“So long as there is demand for fast food, the companies will find a way to make it profitable to operate restaurants,” Catherine L. Fisk, a professor of labor and employment law at UC Berkeley, told San José Spotlight. “They franchise rather than operate them themselves in order to drive down the company’s labor costs by shifting responsibility to the franchisee to comply with the law.”
Parent companies set prices and operating requirements that make it impossible for franchisees to comply with the law while still making a profit, Fisk added. In a recent column, she noted many franchisees cut labor costs to meet corporate directives on working hours and customer service.
AB 257 would force these companies to meet with franchisees and workers to establish prices and operating principles that make money, but are also legal. Franchisees would have the ability to sue franchisors if corporate policies prevented them from meeting health and safety standards set by the proposed Fast Food Sector Council.
“That won’t eliminate businesses opportunities for the franchisees; rather, it will enable the franchisees to comply with the law and still make a profit,” she said.