Newsom reportedly advocated for an exception that permits restaurants that bake and sell bread as a separate item to continue paying their employees the current rate of $16 an hour. This particular exemption could result in substantial savings for billionaire Greg Flynn, a longtime donor to Newsom, who operates two dozen Panera Bread franchise locations across California. The revelation, first reported by Bloomberg on Wednesday, has sparked calls for an investigation from the state's top Republican lawmaker.
"Can any franchisee receive an exemption from the $20 minimum wage law, or must they donate more than $150k to Newsom first?" California Republican Caucus Chairman James Gallagher questioned in a social media post. "This corrupt deal needs to be investigated," he added.
California Senate Minority Leader Brian Jones also condemned the exemption, labeling it "crony capitalism." Jones stated, "Panera couldn't afford the $20 minimum wage requirement for fast food restaurants imposed by Democrat lawmakers. Fortunately for them, their franchise owner donated over $160,000 to Governor Newsom, who secured an exemption for them. Unfortunately, other restaurants lacked such substantial donations and now must comply with the new minimum wage by any means necessary, including layoffs and automation."
Jones emphasized, "Campaign contributions should not result in exemptions from legislation. This isn't just 'sausage making,' as the governor suggests; it's crony capitalism. Corrupt and UNACCEPTABLE."
Bloomberg's report highlighted Flynn's prior business dealings with Newsom and his opposition to the FAST Act, which initially included the new regulations. This led Flynn to lobby Newsom's office to exclude Panera Bread as a fast-food chain. Talks between labor groups and the fast-food industry eventually led to the repeal of the law last year and the implementation of compromised regulations that included the bread exemption and the $20 minimum wage.
Flynn, recognized as the largest franchisee in the U.S., owns numerous Taco Bell, Pizza Hut, Wendy's, Panera Bread, and Applebee's locations. He contributed $8,400 to Newsom's 2018 campaign, $100,000 to support the governor's efforts against the 2021 recall, and $64,800 to his 2022 campaign.
