In the California Legislature’s latest attack on the fast-food industry, Assemblymember Chris Holden (D-Pasadena) introduced the Fast Food Franchisor Responsibility Act (“AB 1228”). AB 1228 was introduced shortly after a Sacramento County Superior Court judge issued a preliminary injunction to stop the controversial Fast Food Accountability and Standards Recovery Act or “FAST Recovery Act” (AB 257) from taking effect, pending a vote by California voters, as we previously reported here.

Under AB 1228, a fast-food restaurant franchisor would be required to “share with its fast-food restaurant franchisee all civil legal responsibility and civil liability for the franchisee’s violations of prescribed laws and orders or their implementing rules or regulations.”

Examples of such laws include the California Fair Housing and Employment Act and the Labor Code.  As a result, a franchisor’s potential liability under these laws would be shared with a franchisee even though the latter actually may be the one responsible for the alleged violations.  A franchisor would have the opportunity to cure any violation following 30-days’ written notice before a civil action may be commenced.  The period to cure any violation will be extended to 60 days upon written request by the franchisor, for purposes of completing an investigation.  If the noticed violation is cured (i.e., if a franchisor abates each violation alleged, ensures the franchisee is in compliance and “makes whole” any affected employee) during this time, the franchisor shall not be liable in a civil action.

Perhaps we’re too skeptical, but it seems doubtful that most trial lawyers in California will be satisfied with any curative measures a franchisor may attempt to make.

Further, AB 1228 invalidates any agreement between the franchisor and franchisee attempting to waive this joint-liability or seek indemnity.  Lastly, AB 1228 authorizes a franchisee to sue a franchisor for monetary or injunctive relief if the terms of their franchise agreement prevent the franchisee from complying with the proposed law.  AB 1228 expands on this stating that “there shall be a rebuttable presumption that any changes in the terms of a franchise that increase the costs of the franchise to the fast-food restaurant franchisee create a substantial barrier to compliance.”

We will continue to monitor the AB 1228 and provide updates.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.

Photo of Ariel Brotman Ariel Brotman

Ariel Brotman is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and…

Ariel Brotman is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and breach of contract litigation, in both the single-plaintiff and class-action context. She also counsels employers on a diverse range of workplace issues.

Ariel earned her J.D. from USC Gould School of Law, where she was a member of the Southern California Interdisciplinary Law Journal. During law school, she was also a clinical student in the University of Southern California Immigration Clinic. In addition, she served as a judicial extern to the Honorable Robert N. Kwan in the United States Bankruptcy Court, Central District of California.