Newsom exempts Panera Bread from California's new $20 minimum wage law - CEO donates to his political campaigns

Cristina Laila
Gateway Pundit
Wed, 28 Feb 2024 03:20 UTC

© unknown

California Democratic Governor Gavin Newsom

Just brazen corruption.

California Governor Gavin Newsom (D) carved out an exemption for Panera Bread from the state's new insane $20 minimum wage law because its billionaire CEO Greg Flynn donates to his political campaigns.

In September California Governor Gavin Newsom (D) signed a law raising the minimum wage for fast-food workers to $20 per hour. During the signing Newsom said:

"Eighty percent of the workforce, these fast food places - 80 percent of people of color, two thirds...are women, the majority are breadwinners and we have the opportunity to reward that contribution, reward that sacrifice and stabilize an industry in turn. What a remarkable moment."

According to Bloomberg, Newsom pushed for Panera Bread to be exempt from the new minimum wage law. Flynn, a billionaire restaurant franchisee, is a Newsom donor and was involved in business dealings with the California Governor.

Newsom told reporters of the exemption that it's "part of the sausage-making" of politics.

Greg Flynn previously criticized the minimum wage bill dubbed the FAST Act. He said it would destroy the franchising in California - and next thing you know his restaurants are exempt.

How did Panera escape the Democrats' new minimum wage bill?

Panera is given an exemption because it 'bakes bread and sells it as a stand-alone item.'

Bloomberg reported:

Billionaire Greg Flynn, who made his fortune running one of the world's largest restaurant franchise operations, is getting a new boost from sourdough loaves and brioche buns.

That's because a California law that's about to raise the state minimum wage at fast-food spots to $20 an hour from $16 offers an unusual exemption for chains that bake bread and sell it as a standalone item.

Governor Gavin Newsom pushed for that break, according to people familiar with the matter. Among the main beneficiaries is Flynn, a longtime Newsom donor whose California holdings include two dozen Panera Bread locations.

The specificity of the exemption has puzzled observers for months, especially after the governor told reporters last year that it came about as "part of the sausage-making" of politics. In response to detailed questions, Newsom's office said the wage law was the "result of countless hours of negotiations with dozens of stakeholders over two years" — and will make a real difference for hundreds of thousands of Californians.

Flynn, who has been involved in business dealings with Newsom in addition to contributing to the governor's political campaigns, said in a brief conversation that he didn't play a role in crafting the bread exemption. He didn't respond to requests for comment about his connections to Newsom.

Pizza Hut wasn't so lucky.

In December two major Pizza Hut operators in California announced they would be laying off all of their delivery drivers thanks to a new law that raises the minimum wage to $20 per hour for fast food employees.

Newsom is once again facing a recall effort, the second in three years, as a conservative group initiates a new campaign to oust him from office.

Comment: Newsom's mandatory wage increase for CA employees signals future cuts in staff. Newsom does Panera no favors - nor the wallets of customers as prices rise.

In 2014, Flynn, who is the largest franchisee in the US with thousands of brands including Applebee's, Pizza Hut, Taco Bell, and Wendy's, acquired a Napa Valley resort that was managed by Newsom's hospitality firm, according to disclosure forms.

Flynn has a net worth valued at $1.1 billion, according to the Bloomberg Billionaires Index. He has donated at least $164,800 to Newsom's campaigns.

Michelle Korsmo, head of the National Restaurant Association, told an industry conference last year that "everyone's scratching their head" about the bread exemption. "You may be celebrating or you may be lamenting the bakery exemption," Korsmo was quoted as saying by Bloomberg. "But remember, all of that comes through relationships."

Flynn quietly lobbied Newsom's aides to reconsider whether Panera Bread can be considered fast food, according to Bloomberg News.

The exemption for bread sellers was inserted into the legislation after the union that was pushing for the hike in minimum wage accepted it as a concession aimed at getting the governor's support, the report stated.

Earlier this month, Chipotle executives warned that consumers in California should expect to see "significant" price hikes due to the minimum wage hike.

Jack Hartung, Chipotle's chief financial and administrative officer, told investors on an earnings call that the price hikes are necessary to keep up with increasing labor costs.

McDonald's CEO Chris Kempczinski warned in October that the Big Mac maker would also need to hike the price of its menu items in California. The chain has increased prices nationwide amid rampant inflation, including charging $18 for a Big Mac meal.

Earlier on Wednesday, Panera Bread agreed to pay $2 million to settle a class-action lawsuit that accused the chain of misleading customers about fees and menu prices for delivery orders.