How Panera Bread ducked California’s new $20 minimum wage law

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The specificity of the exemption has puzzled observers for months, especially after Gov. Newsom told reporters last year that it came about as “part of the sausage-making” of politics.

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.

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.Flynn emerged as a prominent critic of the fast-food bill, known as the FAST Act.

“You may be celebrating or you may be lamenting the bakery exemption,” she said. “But remember, all of that comes through relationships.”The push to transform fast-food employment gained steam during the pandemic, when workers showed up for low-paying jobs while many higher earners were able to work from home.

Over the years, Flynn’s donations to Newsom’s political campaigns have included $100,000 to fight off a conservative-led recall effort and $64,800 to support the governor’s reelection in 2022. Flynn has been known to tout his relationship with Newsom, according to people familiar with the matter, with one saying the fast-food entrepreneur has said he can reach the governor via text.

Another win for Panera: The exemption meant bakeries were also off the hook on industry standards that could have been established by a fast-food council with authority to set rules about working conditions, including training.The fast-food industry’s backlash to the law was swift, with large chains such as McDonald’s and trade associations staging a campaign to repeal the FAST Act almost as soon as it passed.

“We don’t know how that came about,” Willie Armstrong, Holden’s chief of staff, said by phone. Holden recently introduced a bill that would shield other establishments from the minimum wage law. For now, though, Panera will have more wiggle room on wages than its competitors, which could face penalties if they don’t comply. Panera appears to be the largest chain by number of locations in California and countrywide to benefit from the exemption, according to company websites and a Bloomberg review of data compiled by research firm Technomic.


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