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Chris Holden introduces another job-killing bill that would devastate small business owners

February 24, 2023

Sacramento’s nastiness toward fast-food restaurants reignited last week with the introduction by Assemblymember Chris Holden, D-Pasadena, of a bill that would amend state law to make the parent corporation of franchised restaurants share liability for workplace health and safety violations.

Assembly Bill 1228 is backed by the powerful Service Employees International Union, which says the current system protects corporations from having to pay damages for violations of employment law. Another labor advocacy group, Fight for $15, says it found in a survey of California fast-food workers that nearly 425,000 of them had experienced some type of wage theft such as unpaid work, overtime violations, issues with meal breaks or paycheck problems.

SEIU estimates that there are more than 557,000 fast-food workers in California at about 30,000 work sites.

Franchise owners are already liable for labor law violations, but they are generally small-business owners, and the bill’s sponsors seek to find deeper pockets. This is their second try at it — the same provision was stripped out of Assembly Bill 257, which established a state-run Fast Food Council empowered to raise wages as high as $22 per hour.

Gov. Newsom signed AB 257 in September, but the Save Local Restaurants Coalition, backed by major chains including Starbucks and Chipotle, quickly raised $12 million to qualify a referendum, so the law is now suspended until voters speak on the issue in November 2024.

The state Legislature should not be picking and choosing industries to burden with extra layers of laws and liabilities based solely on the political juice of special interests. In this case, Holden has announced that he will be a candidate for the Los Angeles County Board of Supervisors next year, challenging incumbent Kathryn Barger. His political water-carrying for the SEIU on the fast-food liability bill will undoubtedly earn him valuable support at election time.

But the California restaurant industry has been put through the trials of Hercules over the last three years, and restaurants that are still in business, fast-food or otherwise, are not without scars on their balance sheets. This attempt to make franchisees a more lucrative target for lawsuits could be the last straw for many small businesses. If they go out of business, their employees’ jobs go with them.

Orange County Register

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Chris Holden introduces another job-killing bill that would devastate small business owners

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