From NFIB California State Director John Kabateck
A committee hearing in the State Capitol last week had me wondering if “democracy dies in darkness,” as the Washington Post’s masthead warns, or if it really dies in deals – political deals crafted to purposely eliminate the healthy scrutiny of public exposure.
California’s new fast-food law, which took effect this month on April 1, has been a two-year sumo wrestling match between the industry representing franchisees and big labor, led by the Service Employees International Union (SEIU). It started with the 2022 passage and signing into law of Assembly Bill 257, which would have made California the only state in the nation ever to seize complete control of all wage and workplace decisions from fast-food franchisees and given it to a new state agency to regulate.
The industry responded by quickly gathering enough signatures for a 2024 ballot referendum that had a good chance of voiding the new law. Assemblyman Chris Holden, author of AB 257, didn’t want to see that happen and came back with a deal, Assembly Bill 1228, which de-fanged enough of the sharpest incisors in AB 257 to calm the waters. The deal kept the minimum-wage increase to $20, at least for now.
But wait. It later came to light, thanks to reporting by Bloomberg, that a special exemption from having to pay the new, higher minimum wage was awarded to a friend of the governor who owns numerous Panera bread franchises. Naturally, and rightfully, an uproar ensued, and after reaching its peak, seemed to be subsiding.
But wait. Thanks to reporting by KCRA-TV’s Ashley Zavala, it came to light that the deal was negotiated by the principals under the shroud of nondisclosure agreements (NDAs). So who cut the deal and what else was agreed to? Don’t ask the one person who should know everything about his bill, Assemblyman Holden has gone Sergeant Schultz, seeing nothing, hearing nothing.
In a scathing editorial by The Sacramento Bee on the treatment Assembly Bill 2654, which seeks to end NDAs, received last week (April 25), it pointed out, “NDAs may have their role in the corporate world, but they have no place in the legislative process. They certainly should never be used to withhold pertinent information from the public. In the case of Panera-gate, we don’t know how or why the bread-making exemption to the state minimum wage was crafted. Even the author of the bill says he was not a part of the process.”
Assemblyman Vince Fong, author of AB 2654, testified, “I have never heard of the use of NDAs in the negotiation of legislation … The public already has a poor perception of the legislative process. Allowing for the use of NDAs will further erode and corrode their trust in government.”
Robert Lapsley, president of the California Business Roundtable, concurred with Fong, “The bill [AB 2654] is not a solution in search of a problem. It’s a necessary safeguard against the erosion of transparency in our state government.” NDAs “effectively establish a sign-to-play standard that contradicts the principles of democracy and fairness upon which our system is built.”
Also to the point was Assemblyman Bill Essayli, a member of the Assembly Elections Committee, which heard AB 2654, who countered opponents’ claims of being private parties not beholden to the same rules as lawmakers. “You’re not a private party when you’re sponsoring a bill, you’re negotiating a bill, you’re acting as an auxiliary for the Legislature, you are providing language, you are negotiating on behalf of legislators or the governor … Why should you not be subject to the same sunshine transparency rules that we are?”
No matter. In the end, AB 2654 failed to pass the Assembly Elections Committee, which, as The Bee phrased it, “made a quick and quiet kill … that was conniving and obvious proof of an unapologetic cabal with narrow membership … [Committee Chair Gail] Pellerin later fled the chambers, hiding behind staff as she refused to answer questions from a journalist.”
I’m proud Kabateck Strategies client NFIB was one the three signatories, along with the California Business Roundtable and the California Business Properties Association, on a letter of support for AB 2654. We’ll keep up the good fight. Nothing good comes from secrecy.
Democracy doesn’t die only in darkness, not in California, it can also die in the deal.
