News : Labor gets stuck in the drive-thru

Wednesday, July 12, 2023

Labor gets stuck in the drive-thru

Jul 12, 2023

By Lara Korte, Dustin Gardiner and Sejal Govindarao

Presented by CCIA

DRIVING THE DAY: California Attorney General Rob Bonta, who is weighing a run for governor, raised $1.36 million in the last six months, bringing his cash on hand to $3.6 million.

Lt. Gov. Eleni Kounalakis, the lone declared candidate for governor in 2026, is sitting on $6.7 million. It’s a significant haul for Bonta, especially since attorney general campaigns have far smaller contribution limits than governors.

McDonald's | AP Photo

A McDonald's sign. | AP Photo/Richard Vogel

THE BUZZ — Organized labor is pushing California lawmakers to enact first-in-the-nation standards for fast-food workers that could have major implications for global corporations. But what started with one bill last year has turned into a grueling multi-year fight.

We saw another round in that fight Tuesday, when Senate Judiciary Chair Tom Umberg announced that Assemblymember Chris Holden’s closely watched bill on fast-food franchise liability was pulled from that day’s agenda at the behest of proponents, which include SEIU California.

The bill is not dead — Umberg said he plans to reintroduce it at a hearing in August or September. But in the meantime, he said, “both sides of the issue must get to the table, stop posturing and negotiate a global agreement.” David Huerta, president of SEIU California, said in a statement that the bill will get a vote when the Legislature returns from summer recess.

“We are confident that the Legislature and the administration are fully committed to bringing greater accountability to this industry,” he said.

It’s not clear exactly what prompted the delay, but it’s not uncommon to pull bills when the authors or proponents know they don’t have the votes. In this instance, there were rumblings of misgivings among Democrats on the committee who feared the measure might go too far in requiring corporations like McDonald’s to be legally liable for labor violations in their many franchises.

Holden didn’t elaborate on negotiations. Nor did Umberg.

The snag highlights the ongoing feud between labor and the restaurant industry in California. Tuesday’s conflict traces back to last year’s FAST Act, another bill by Holden to establish a fast-food council that would propose standards around wages and working conditions for employees. That bill managed to pass the Legislature in spite of heavy opposition from a coalition of restaurants and businesses — but not without getting a haircut.

A similar joint liability provision was stripped out of the FAST Act in the Senate Judiciary Committee last year. That move was seen by many as a concession to appease the business interests lobbying against it. But shortly after Gov. Gavin Newsom signed the bill, the coalition of restaurants went to work qualifying a referendum.

Now, that liability provision is back on the table and seen largely as labor’s response to restaurants trying to undo the FAST Act. It passed through the Assembly, but now seems to be getting a lukewarm reception among moderate Democrats in the Senate, who must weigh the risks of opposing powerful labor groups.

Corporations are digging deep to stop California from placing more regulations on fast-food establishments, with the fear that other states could adopt similar measures. Opponents spent $10 million qualifying the referendum against last year’s bill, and McDonald’s earlier this year dropped $1 million into a state independent expenditure committee to protect its interests.

On Tuesday, Umberg warned that companies are not off the hook — there is still an appetite to hold them liable for repeat labor violations at their franchises.

“They would be well served to negotiate in good faith,” Umberg said.

HAPPY WEDNESDAY. Thanks for waking up with Playbook. Now let’s talk happy hour — POLITICO California is holding another meet-and-greet tonight in downtown Sacramento. Help us give a warm welcome to Dustin and catch up with the whole POLITICO team as we build out our Golden State expansion. Cocktails and conversation start flowing at 6 p.m. Details here.

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WHERE’S GAVIN? Nothing official announced.

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A link tax is the last thing California needs. Oppose AB886.

FRESH INK

FIRST IN PLAYBOOK — MIN’S RIVAL: Assemblymember Dave Min apparently faces a run for his money in the race for CA-47, the seat held by Democratic Rep. Katie Porter (now running for U.S. Senate). Min took to Twitter this week to boast that he raised more than $400,000 in the second quarter. A day later, the campaign of his major Democratic rival, lawyer Joanna Weiss, said she had matched his quarterly haul. The situation could spell trouble for the assemblyman, whose campaign has faced headwinds since his DUI arrest in May. The Orange County battleground district is a top priority for Democrats; the party wants to prevent former Republican Assembly Member Scott Baugh from flipping the seat.

FIRST IN PLAYBOOK — FRIEDMAN MONEY: Assemblymember Laura Friedman reports raising $268,064 in Q2, bringing her fundraising total for her CA-30 campaign to $604,000. Friedman faces a crowded field in the race to succeed Rep. Adam Schiff, including state Sen. Anthony Portantino and former Los Angeles City Attorney Mike Feuer. Friedman represents 63 percent of the congressional district in the Assembly, per her campaign.

INFLUENCERS

Sacramento Mayor Darrell Steinberg speaks at a news conference held by Gov. Gavin Newsom, right, in Sacramento, Calif., on March 20, 2019. A group of 11 U.S. mayors have pledged to pay reparations for slavery to a small group of Black residents in their cities. The mayors have committed to form commissions to advise them on how to develop the programs. (AP Photo/Rich Pedroncelli, File)

MHSA MAKEOVER — One of Darrell Steinberg’s crowning achievements is about to get a makeover — and he likes it that way.

The Sacramento mayor was the lead architect of California’s Mental Health Services Act as an assemblymember in 2004. He's now cheering on efforts by Gov. Gavin Newsom to retool the measure and require a third of the $4 billion generated annually to be used for housing.

The change is fueled, in large part, by public pressure. Homelessness has become a defining characteristic of California to the rest of the nation, and officials at every level of government are feeling compelled to take action. Steinberg, who is now arguably closer to the problem as a mayor, said the atmosphere has changed in the past 20 years.

Homelessness was his original motivation, he said. But In 2004, “no one was paying much attention to mental health,” he told us this week. The measure that would eventually become Prop. 63 faced no paid opposition. It would go on to generate billions for mental health care programs in counties every year, and become a key issue area for the Sacramento mayor.

Now, Newsom has a new vision for it. The governor is leaning into programs that he says will get people off the streets quickly and address the most vulnerable cases — and co-opting the MHSA as part of it. Lawmakers will vote on a bill asking voters to amend the measure in the coming weeks. The plan is to pair it with a $4.68 billion bond for behavioral health beds that will go on the 2024 ballot.

Steinberg could, hypothetically, be bitter about his marquee career achievement getting an overhaul, and he acknowledges that. But greater things are at stake, he argued.

"I could have taken a different attitude and said, 'What do you mean!?’” he said. ”But, you know, no law is perfect, and things have changed over 20 years."

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AROUND THE STATE

— “Reparations are proposed for Black Californians. What about Indigenous people?” by the Los Angeles Times’ Tyrone Beason: “D’Arcy worries, however, that the conversation around reparations fails to include Indigenous people and a basic truth: Slavery, the seizure of properties, the bulldozing of homes and businesses, the discriminatory real estate practices and biased treatment by law enforcement — everything that deprived Black and brown people of their wealth, their sense of belonging and sometimes their lives — took place on territory that was already scarred by loss.”

— “Can Biden plan to curb an animal tranquilizer found in fentanyl prevent California overdoses?” by McClatchy’s Gillian Brassil: “The White House says it has a plan to curb the use of a veterinary tranquilizer that, when combined with the already-deadly fentanyl, only heightens the danger of fatal overdose.”

— “California built a safety net for undocumented immigrants. Now deficits could leave some behind,” by CalMatters’ Jeanne Kuang and Nicole Foy: “Newsom has backed several program expansions including public health coverage for immigrants, which will total $2.6 billion annually. But he has said he wants to avoid cutting services in deficit years, so he won’t commit to further expanding programs unless the state has funds to sustain them long-term.”

BIRTHDAYS

Beth Lester Sidhu … Madeline Saunders of Stu Loeser & Co.

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Lawmakers are proposing a bill that would charge websites every time they link to a news article. A new tax is the last thing CA needs. Oppose AB886.

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