Sacramento — One of California’s burgeoning “new economy” business models is the meal-subscription plan, by which companies such as Blue Apron send recipes and prepackaged gourmet ingredients to subscriber’s homes – everything they need to prepare a fresh meal. It’s great for folks who like to cook, but have little patience for grocery shopping.
Blue Apron employs 1,250 people at a facility in the economically struggling Bay Area city of Richmond. State officials ought to be celebrating the company’s growth – as well as its location in a job-starved city, focus on promoting healthy diets, and commitment to using California-grown produce that is farmed with sustainable agricultural methods.
Instead of promoting this as a California success story, lawmakers have passed a poorly drafted set of new regulations targeting this upstart business model. Assembly Bill 1461, now on Gov. Jerry Brown’s desk, sends a clear message to these companies: they’re better off setting up shop outside the state and shipping the meals to customers in California, thus bypassing the hassle.
The stated goal of the legislation is to require the people who work for these meal-delivery services to get a “food handler” card requiring them to attend some training sessions. It sounds innocuous, but the broader result is to provide unions with the names and contact information of these workers, so they can be contacted about joining a union. Once a union has a foothold, it can insist on old-school work rules that undermine this newfangled business model.
Currently, there’s a bright line for food-service regulation. If you’re a restaurant or, say, a butcher shop, you follow local food-handling codes and are subject to inspections from county health officials. If you’re a food-processing business, you follow state and federal Food and Drug Administration rules that go far beyond what local food-handling operations have to follow.
The legislation attempts to treat meal-delivery services as restaurants, but some already are registered as food processors, thus turning that bright line into something muddled. It gets particularly confusing because union backers of the bill use Blue Apron as justification, yet the rules apparently don’t apply to the company – at least not unless unions come back next year with revisions.
Jim Araby, a United Food and Commercial Workers Union official, penned a column in Capitol Weekly in May accusing Blue Apron of having “bucked common-sense safety measures.” The Assembly Committee on Health backgrounder points specifically to Blue Apron as a reason the legislation is needed.
Indeed, during committee debate, the senators expressed uncertainty over which companies would be covered by the new rules.
Blue Apron is absolutely certain the bill wouldn’t apply to them, so they’re neutral on it. The meats its employees pack come sealed from the butcher and the company is certified by the state as a food-processing firm, said a Blue Apron official at a Senate committee hearing. Aaron Moreno, who testified in support of the bill on behalf of the California Grocers Association, agreed with Blue Apron on that point: “So Blue Apron, it wouldn’t apply to their company, regardless.” The bill clearly does apply to meal-delivery services that haven’t registered as food processors.
If you still think this about food safety, consider that grocery workers who cut meats and fresh seafood remain exempt from these food-handling-card requirements, as do food handlers who work under a collective-bargaining agreement. The Senate analysis said the bill also “would raise questions as to similar businesses that are located in other states and delivering products to California customers.”
That analysis noted that legislators are “not directly addressing the larger question of which is the appropriate regulatory structure for these businesses.” Indeed, it would be nice to flesh these things out before passing legislation. Then again that would make sense if the bill were actually about improving food safety and driven by health officials. But such common-sense wouldn’t matter if the legislation is about targeting businesses that threaten the current grocery-store-based system, where unions have long been successful at organizing employees.
Oddly, the measure is written by Democratic Assemblyman Tony Thurmond, who represents the same city where Blue Apron’s California facility is located. That, too, seems hard to understand, given that local legislators tend to support hometown businesses. But Thurmond is running for state Superintendent of Public Instruction, so broad-based labor support wouldn’t hurt.
“I confess, I’m now a little bit confused,” said Sen. Richard Roth, D-Riverside, during the committee debate about which companies are covered by the bill. He nevertheless voted for the measure, as did other seemingly confused legislators.
But it’s not nearly as confusing as it seems. An editorial by the liberal-leaning Sacramento Bee pointed to A.B. 1461 as a bill “that ought to die” because it’s a raw special-interest deal. Legislators ought to “ask themselves whether it’s the proper place for the Legislature to, say, determine that the United Food and Commercial Workers should dictate health policy,” the newspaper opined. The Bee added that the bill adds regulation “without providing clear benefits to consumers.”
But the benefits are clear to union organizers even if they have to come back next year with a legislative tweak that quietly expands its application. The measure is yet another example of how California’s politically powerful unions stifle business growth and innovation. We’ll soon see whether Gov. Brown sides with retrograde work rules pushed by his union allies or with the creative tech economy he so often touts as California’s future.
Steven Greenhut is a contributing editor to the California Policy Center. He is Western region director for the R Street Institute. Write to him at firstname.lastname@example.org.