California campaign withdraws veto referendum on fast-food employment law from 2024 ballot under new process

On Dec. 29, the Save Our Local Restaurants PAC withdrew a veto referendum from the Nov. 5, 2024, ballot that would have repealed California Assembly Bill 257 (AB 257). AB 257 was designed to establish a 10-member fast food council authorized to adopt a minimum wage for fast food restaurant employees not to exceed $22 per hour. 

This is the first veto referendum withdrawn under a new California law, Assembly Bill 421, passed in Sept. 2023. This law allows veto referendum proponents to withdraw their qualified referendum at least 131 days before the election or, when a referendum qualifies with less than 131 days before the election, when a petition is certified.

Save Our Local Restaurants announced on Sept. 11, 2023, that it had reached a compromise with state legislators under Assembly Bill 1228 (AB 1228). The bill will set a minimum wage of $20 per hour for limited-service restaurants that are part of a chain with more than 60 locations beginning on April 1, 2024. The bill also established a Fast Food Council with the authority to increase the hourly minimum wage annually by no more than the lesser of 3.5% or the change in inflation. Assembly Bill 257, the targeted legislation of the veto referendum, was also repealed with the passage of the compromise and the withdrawal of the veto referendum.

After the signing of AB 1228, Matt Haller, president and CEO of the International Franchise Association, said, “Signature of AB 1228 preserves the franchise business model in the state and solidifies the best possible outcome for workers, local restaurant owners, and brands. Commonsense has prevailed, as franchising is responsible for creating opportunities for hundreds of thousands of people to become small business owners, and this agreement eliminates the existential threats our members faced.”

Save Our Local Restaurants reported $71.7 million in contributions through Sept. 30, 2023. The largest donors to the campaign were Chipotle ($12.8 million), In-N-Out ($12.8 million), Chick-fil-A ($11.6 million), McDonald’s ($11.1 million), and the National Restaurant Association ($5.5 million).

Asm. Chris Holden (D-41), the primary sponsor of AB 257 and AB 1228, said, “My goal for AB 1228 was to bring relief and solutions where they were needed and together with my colleagues and Governor Newsom, that is what we have done.”

The veto referendum is the ninth citizen-initiated ballot measure withdrawn in California, which in 2014 authorized proponents to withdraw initiated state statutes and constitutional amendments at least 131 days before the general election. Campaigns have withdrawn their ballot initiatives for several reasons, including:

  • working with legislators to pass compromise legislation;
  • requesting that legislators withdraw bills that initiative proponents opposed; or
  • qualifying a second proposal to replace the first proposal.

Eleven statewide ballot propositions have qualified for the ballot in California for elections in 2024. California voters will decide on a pair of bills appearing as Proposition 1 designed to make changes to the state’s Mental Health Services Act on March 5. The remaining 10 measures will appear on the general election ballot on Nov. 5. Seven citizen initiatives have qualified for the ballot, including one veto referendum. The initiatives relate to pandemic prevention, the state’s minimum wage, remediation for labor violations, vote requirements for new taxes, local rent control, and oil and gas well regulations.

The state legislature voted to send four constitutional amendments to statewide ballots that address the local voter requirement for publicly-funded housing projects classified as low rent; a right to marry and repeal Proposition 8 (2008); vote requirements for initiatives that change vote thresholds; and the vote threshold for local special taxes to fund housing projects and public infrastructure.

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