The NRA wants to stop California’s FAST Recovery Act and attract new workers to the industry

Editor’s Note: This article is part of an ongoing series exploring the political issues affecting restaurants and shaping the industry’s job market. Interested in discussing restaurant policy? Email us at [email protected].

The high cost of the restaurant business has sparked a political fight between owners and employees as the industry’s labor woes worsen. The National Restaurant Association is one of the biggest players in this conflict, pushing for changes that would lower costs for restaurateurs.

Although restaurant employment has reached pre-pandemic highs, the main concern of operators continues to be the labor supply, according to the NRA. Restaurant wages have kept pace with, and at times outperformed, inflation, making the restaurant sector the only major industry to see such wage growth post-pandemic.

But restaurant workers are joining forces to negotiate for higher wages, safer work environments and extended benefits. A slow wave of union organizing is putting pressure on employers ranging from starbucks and chipotle very small independent make such changes, which would incur additional costs for operators with thin margins.

The NRA is forming a coalition with franchises and national brands to defeat an effort by the Service Employees International Union and fast food workers to remake California labor law. Such changes would include an industry standard-setting council mandated by the FAST Recovery Act (AB 257).

Restaurant Dive spoke with Sean Kennedy, the NRA’s executive vice president of public affairs, about how the association plans to address issues facing restaurants.

This interview has been edited for clarity and brevity.

RESTAURANT DIVE: Let’s start with AB 257. How does the National Restaurant Association plan to stop it?

SEAN KENNEDY: California voters signed a petition saying the bill was offensive enough to them that they wanted it put on hold until it could be on the ballot in November 2024. The coalition gathered about 1 million signatures. That’s revealing.

What we’ve found is that when you explain the gist of what the FAST Act stands for, people scratch their heads and say, “That doesn’t make any sense. Why are you putting a new level of regulation on a subset of an industry? There are many small businesses up and down Main Street. Why would you treat one segment of one of those businesses as different from the others?

AB 257 targets national brands, which may have small business elements in terms of franchisees, in the case of McDonald’s, or may not, in the case of Starbucks.

KENNEDY: You [may] get the marketing push of a national brand, but you won’t get much more. You’re still expected to create a work environment that draws people to come and stay, just like the independent burger joint down the street. We are a small business industry in general.

Considering how many small business owners there are and how culturally entrenched this industry is, how did SEIU get AB 257 done?

KENNEDY: I don’t think it’s a surprise that California is the first state to do something like this. Organized labor has deep roots in the [California] assembly and senate, and they used it very effectively.

Coming out of the pandemic, he had a lot of sympathy for workers in the restaurant industry, so it was probably a bit of a perfect storm where the messaging aligns with it being a state that naturally has strong ties to organized labor.

Does that have any implications for state policy outside of California?

KENNEDY: There has not been any significant repartee to the FAST Act that has moved. Is this California specific legislation? We act like it’s not. We see this as such a unique challenge for a segment of our membership that we are investing in advocacy and public relations strategies in several states where we believe it could spread.

We’re interacting with chambers of commerce, engaging with local elected officials, mayors, state representatives, and restaurant owners.

Our defense is based on using the restaurant owners themselves so that they are not only the face of this, but also the voice. At the end of the day, they own one or two restaurants in a community and they will face a unique set of regulations that other businesses won’t. And to describe what the impact will be: Will this make it more likely that they will expand or employ more people or support the community, or less?

Is the National Restaurant Association concerned about the organization in the workshops and the militancy of the workers?