Last week, California lawmakers announced a grand bargain between labor unions and the fast-food industry. The centerpiece of the deal was a new fast-food regulatory council, with representatives from labor, workers, and restaurants. Once formed, this council will have the power to regulate wages and working conditions for the whole industry. The deal was immediately hailed as a win for labor and a model of compromise—a way to head off a potentially costly fight at the ballot box this fall. But whatever its political merits, its legal ones are dubious. The deal gives regulatory power to private, financially interested parties. And that feature violates a long overlooked but still viable constitutional doctrine: the rule against private delegation.

The deal emerged out of years of bitter wrangling. Unions had long lobbied for some kind of “sectoral bargaining” scheme covering California’s fast-food workers. After coming up short several times, they finally broke through in 2022 with the FAST Recovery Act, a law creating a quasi-sectoral-bargaining council. Restaurants, however, didn’t think the council was a great idea, and they blocked it by filing a referendum. Incensed, unions and their allies retaliated with a bill making restaurant franchisors jointly liable with their franchisees. And the restaurants, fearing joint liability more than bargaining, relented. They struck a deal with labor, scrapping the referendum and joint liability but preserving the council.

Under the compromise, the new council will consist of nine members: two franchisors, two franchisees, two workers, two worker “advocates,” and one “neutral” chairperson. These members will regulate wages and working conditions across the industry. Wages will immediately rise to $20 an hour, after which the council can raise them even higher.

Technically, the council won’t directly regulate anything. Instead, it will propose standards to the state labor commissioner. The commissioner will then review these standards to make sure they meet certain statutory criteria. If they do, she will issue them as formal regulations. And those regulations will bind fast-food restaurants across the state.

The result will be an arrangement by which certain workers, unions, and businesses effectively regulate the whole industry. Whoever these representatives are, they will write the rules for themselves and for their competitors. That structure raises immediate questions about the council’s neutrality; given the incentives facing private competitors, abuses are easy to imagine. But maybe more important, the structure also implicates the private-nondelegation doctrine.

The private-nondelegation doctrine is actually two separate doctrines. The first stems from the “vesting” clauses in articles I, II, and III of the U.S. Constitution. Those clauses vest all federal government power in the three branches. And by implication, they also forbid those branches from delegating their power to private parties. The doctrine is important, but it applies only to the federal government. So it has little bearing on California’s new council.

The second doctrine, however, applies equally to the states. It relies not on government structure per se, but on background principles of due process. Due process has long been understood to forbid a person from being a judge in her own case. That rule stretches back to 17th-century English common law. One famous example comes from Dr. Bonham’s Case, where a court invalidated a royal charter authorizing a medical college to fine and imprison physicians who practiced without a license. The charter effectively gave the college the power to license, evaluate, and punish other practitioners. In the court’s view, that arrangement violated fundamental fairness: even the Crown couldn’t authorize a private party to sit as a judge of its economic competitors.

Extending that principle, modern courts have reasoned that it is likewise unfair to give self-interested parties regulatory power. Regulating, like judging, is a government function¾one we expect the government to perform disinterestedly. But we cannot expect disinterested regulation from someone with money at stake. So courts have invalidated delegations of regulatory power when the party wielding the delegated power (a) is a self-interested entity, and (b) has regulatory authority over its competitors.

Those criteria aptly describe the new council. The council consists of a limited selection of industry participants. Those participants set wages and working conditions for everyone, including their competitors. Yes, their standards are reviewed by the labor commissioner. But the commissioner’s review is limited. As long as the council acts within its delegated authority, the commissioner must approve its proposals. The commissioner cannot amend or reject the proposals just because they’re unfair. And that same basic problem has led courts to invalidate regulatory delegations more than once.

Lest we get lost in the doctrinal weeds, we should remember why courts are suspicious of this kind of delegation. It’s not that public officials are somehow better suited to regulate. Rather, it’s that private delegations allow public officials to duck accountability. Public officials can offload hard decisions onto parties with no responsibility to the electorate. And when the electorate objects, the officials can simply point the finger at private decisionmakers.


The result is a regulatory structure at odds with democratic ideals. We generally think that laws should come from people accountable to the public. But private regulation subverts that principle. It allows interested parties to impose their policies on competitors, who have no way to resist. The competitors cannot petition the government, which has no say over the underlying policies. Nor can they petition the real decisionmakers, who have no incentive to listen. Instead, they can either submit or go out of business. If due process means anything, it surely means that we cannot force people to make that choice—no matter how politically expedient the arrangement may be.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at [email protected].