California Dictates How Business Owners Manage Their Own Businesses: The Unprecedented, New FAST Recovery Act (Part II).

Fast Food Council:

The new franchise boss.

Through the FAST Recovery Act, California government officials promise more money to fast food workers without ever taking the money out of the government coffers. Instead, it comes out of the pockets of private employers.

And what do these private employers get in return? Nothing more than what they were already getting (same amount of work for a now more expensive wage), presumptions against them for discrimination and retaliation under certain circumstances, a demotion to Fast Food Council “employee”, and ten new “bosses” who were not elected -but selected- by the California state government. We will delve further into many of these issues later in this series.

For now, we will discuss just how new and unprecedented the FAST Recovery Act is. It is the first of its kind, and is the perfect example of where the state of California has been heading toward for years now: more and more government regulation, especially on private individuals. In this case, the government is going after private employers, many of whom have saved for years (if not an entire lifetime) to own a franchise. These are not people who sit around and wait for handouts. No, these are people who work hard, struggle, and believe that one day they too can own a piece of the American dream- a business of their own.

One of the major issues with this new law is the fact that it is creating a governmental agency, an arm of the state government, that is not elected. Instead, it is controlled by a select few. Specifically, the new law creates the Fast Food Council within the Department of Industrial Relations, and this council will be comprised of ten members “appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe its powers.” Yes, the Fast Food Council, which will control all employers and operators of fast food franchises in the state of California, will be selected as follows: Governor Newsom himself has the unbridled power to appoint 8 out of the 10 members of the Fast Food Council, and the other 2 members will be appointed by the Speaker of the Assembly and the Senate Rules Committee. There is no criteria for these appointments, nor is there a way to challenge these appointments. The Fast Food Council will also dictate their own powers. If this is not concerning, wait until you find out how pervasively the new law will affect the employer-employee relationship.

This governmental agency, which is hand picked by only a select few, will have the power to control and regulate every single franchise in California. Never before has a government agency had such pervasive power that essentially permeates all aspects of the employer-employee relationship. The new law itself admits that the Council is meant to micromanage franchise employers, stating verbatim that its purpose is to 1) create “minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of” the fast food workers and 2) supply “the necessary cost of proper living to fast food restaurant workers.” Essentially, the new law openly states that the state government, through ten politically appointed individuals, will dictate to franchise owners and operators on how to run their businesses and manage all aspects of their employer-employee relationship, including managing employees’ wages, hours, and working conditions.

On its face, the new law is clearly an overreach by the state government into an agreement between two private parties, the employer and the employee. In an effort to combat lack of compliance with the current employment rules and regulations, the state government has created yet another government agency to create even more employment rules and regulations. Interestingly, franchises are currently some of the most heavily regulated businesses in the entire nation. Not only do franchises have to comply with state employment rules and regulations, but they also have an entirely different set of rules to follow from the franchisor itself.

Stay tuned for Part III where we discuss some of the major issues this new law will bring for both the employers and the employees.