Bloomberg News reports that Gov. Gavin Newsom's press secretary said the governor pushed to exempt bakeries from the state's fast food wage law to benefit political donors who operate Panera Bread restaurants. , calling the report “ridiculous.”
According to a Bloomberg article published this week, Greg Flynn, the billionaire CEO of the restaurant group that operates Panera stores, told an aide to Newsom that “fast-casual chains like Panera should be fast-tracked.'' “We urged people to reconsider whether or not it should be classified as food.”
The article claims that the California Legislature, Service Employees International, agreed to exclude restaurants that operate bakeries “as a means of gaining the governor's support for the bill.” “The basis for this was the governor's long-standing relationship with Panera franchisees,” the article said.
“The governor has never met with Mr. Flynn about this bill and this story is ridiculous,” Newsom's press secretary Alex Stack said in a statement. “After review by our legal team, it appears that Panera is not exempt from the law.”
Bloomberg did not immediately respond to a request for comment on the governor's office statement.
The governor's office said the bill is the result of countless hours of negotiations over two years, with Newsom administration officials meeting with dozens of business owners and union representatives.
Whether Panera is included in the law will depend on whether the company makes its own bread or brings in dough made at a central facility, people involved in the discussions said.
According to the law, bakeries are exempt from paying high wages.
“This exemption applies only if the establishment produces bread for sale as a separate menu item and does not apply if the bread is sold only as part of another menu item,” the law states. Masu.
Flynn Holdings is a restaurant group and real estate investment company that claims to be the nation's largest restaurant franchiser. The company's restaurant portfolio is vast, with more than 444 Applebee's restaurants, 280 Taco Bell locations, 133 Panera Bread cafes, 367 Arby's restaurants, 937 Pizza Huts, and 194 restaurants, according to its website. Includes Wendy's restaurant.
Mr. Flynn has been a major donor to Mr. Newsom's political efforts, including donating $100,000 to fight his failed recall campaign.
Newsom's statement came after California Senate Republican Leader Brian Jones on Thursday called for an investigation into the allegations.
“Simply put, campaign contributions should not be used to buy legal carve-outs,” Jones said. “That's crony capitalism. It's corrupt and unacceptable.”
Successful promotion of labor unions Assembly Bill 257, also known as the Fast Food Responsibility and Standards Restoration Act, passed the state Legislature in 2022. At the time, bakeries were exempt from the law as unions, and the governor's office and other groups sought to define which restaurants the bill applied to.
The original fast food law, which Mr. Newsom signed last September, created a 10-member statewide Fast Food Council to set standards for California's minimum wage, employee hours, and working conditions. , a regional council consisting of worker and employer representatives was established. Under the law, the council could raise the minimum wage to $22 an hour in 2024 for employees at chains with 100 or more restaurants.
Fast food companies quickly launched a successful campaign to qualify for a referendum to repeal AB 257. AB257 suspended the law from taking effect until a statewide vote in November 2024.
Under a new agreement between fast-food companies and workers reached last year, the referendum will be removed from the ballot and workers' wages will increase to $20 an hour starting this year. Bakeries remain exempt from the law.
