Panera Bread is exempt from California’s $20 per hour minimum wage for fast food workers because of an exemption for chains that bake bread and sell it as a standalone item.
That exemption, according to a report from Bloomberg, was pushed for by Gov. Gavin Newsom, who has received donations from billionaire Greg Flynn, whose company operates dozens of Panera Bread locations in California.
The backstory: Last year the California Legislature passed Assembly Bill 1228, which was signed by Newsom last September.
- AB 1228 bumped the minimum wage for fast food employees to $20 per hour, an increase of the $16.21 average wage for fast food workers in 2022.
- Flynn is the largest restaurant franchisee in the nation, operating thousands of locations of Applebee’s, Pizza Hut, Taco Bell and Wendy’s.
Driving the news: Flynn told Bloomberg that he did not play a role in securing the bread exemption, but sources told the publication that he urged Newsom’s aides to reconsider whether fast-casual chains should be classified as fast food.
- The fast-casual exemption never made it through, but the labor group behind the bill – Service Employees International Union – accepted an exemption for restaurants operating as bakeries.
- That won Newsom’s support, and sources told Bloomberg that it was because of Newsom’s relationship with Flynn.
Connections to Newsom: Flynn donated $100,000 to Newsom to help fight the 2021 recall and $64,800 to the governor’s reelection campaign in 2022.
- They also attended the same high school in the suburbs of San Francisco, overlapping for one year when Flynn was a senior and Newsom was a freshman.
- Their professional connections extend to 2014, when Flynn bought a Napa Valley resort managed by Newsom’s hospitality company. Newsom reported an undisclosed amount of income from Flynn’s company, but Bloomerg reports that Flynn did not renew the management relationship after a year.
