Cali. Gov. Newsom’s $20 Minimum Wage Law Under Scrutiny After ‘Bread Baking’ Clause Exempts Panera Bread

An exemption for “bread baking” businesses in California’s new $20 minimum wage law is raising eyebrows after it appears to benefit Democrat Gov. Gavin Newsom’s friend, Panera Bread CEO Greg Flynn.

California’s FAST Act (Fast Food Accountability and Standards Recovery Act) was signed into law by Newsom last September, and requires fast food restaurants to pay workers a minimum of $20-per-hour.

Left out of that requirement, however, are restaurant “chains that bake bread and sell it as a standalone item.”

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The “bread-baking” exemption was reportedly championed by Newsom, who claimed to reporters it’d been hammered out during “countless hours of negotiations with dozens of stakeholders over two years,” and characterized it as “part of the sausage-making.”

Despite denying having part in crafting the exemption, Flynn – who attended the same high school as Newsom and bought one of his Napa Valley resorts in 2014 – had previously expressed vocal opposition to the bill.

From Bloomberg News:

Flynn emerged as a prominent critic of the fast-food bill, known as the FAST Act. In a 2022 opinion piece in Capitol Weekly, a publication covering California politics, he said it would all but kill the franchising business model in the state.

Behind closed doors, he urged the governor’s top aides to reconsider whether fast-casual chains such as Panera should be classified as fast food, according to people familiar with the discussions, who asked not to be named because the talks were private.While that plan wasn’t adopted, the Service Employees International Union, a labor group that was the driving force behind the bill, decided to accept a narrower carve-out as the talks progressed — one that would only apply to restaurants operating bakeries. That position was adopted as a means of winning the governor’s support for the legislation, said a person with knowledge of the discussions. The rationale was the governor’s longstanding relationship with a Panera franchisee, the person said.

According to the New York Post, Flynn “is the largest franchisee in the US with thousands of brands including Applebee’s, Pizza Hut, Taco Bell, and Wendy’s,” and has donated over $164,800 to Gov. Newsom.

Speaking at a conference in 2023, the head of the National Restaurant Association, Michelle Korsmo, said “everyone’s scratching their head” over the exemption, adding the legislation was a result of building key political relationships.

The unseemly appearance of the oddly-specific exemption is being viewed by critics as a prime example of crony capitalism and political favoritism at its finest.

Every fast food restaurant will now have a bakery! pic.twitter.com/MExLRr12sc

— Terry (@TerryinSoCalif) February 28, 2024

Democrats hate small business but give exceptions to their friends, this is fascism.

— Harrison Krank (@HarrisonKrank) February 28, 2024

Total corruption. Not a surprise from Newsom.

If the exemption includes “chains that bake bread and sell it as a standalone item”, every fast food chain restaurant should hire one person – at the lower minimum wage – for a few hours a day to bake bread to sell.

— Eric (@closedownthebar) February 28, 2024

I think this is how the mafia conducts business, too.

— Axiomatic Enemy of the State (@DeTocqueville14) February 28, 2024