Panera Bread will not be impacted by California’s new FAST Act fast food bill, which raises the state minimum wage from $16 to $20 an hour at fast food chains. According to new reporting, this law has an exemption for fast food locations that also bake and sell bread.
Only locations that sell bread as a standalone item will qualify for this new exemption. Once news of this exception broke, many critics were quick to point out the long and beneficial history between California Governor Gavin Newsom and Panera franchise billionaire Greg Flynn.
FAST Act’s Inception
The idea to create a bill that would raise the minimum wage for those working low-paying jobs began during the pandemic. Many fast-food employees were still working during this time, even though others had begun to work from home.
As these food workers were working for low wages, the California legislature began to consider bills that could help them.
A Law for Low-Wage Employees
According to the California legislature, this bill is supposed to address the “abuse, low pay, few benefits and minimal job security” that many in the state face. This bill also allows employees to help regulate the fast food industry they work in.
Legislation of this bill has changed over the past few years, thanks to backlash from many in the fast food industry. New changes include the fact that only chains with at least 60 national locations will be required to pay this higher hourly wage.
Greg Flynn Was an Early Critic of the FAST Act
Billionaire Greg Flynn became an early public critic of the FAST Act. In 2022, Flynn wrote an opinion piece in the publication Capitol Weekly, explaining that this new legislation would basically kill how franchises do business in California.
Flynn is the founder of Flynn Restaurant Group, which remains one of the largest restaurant franchises in the world. Flynn’s franchises include 125 Panera Breads, 900 Pizza Huts, and 440 Applebee’s, among others.
Flynn Tried to Influence the Governor Early On
New reporting has revealed that Flynn tried to influence Newsom when he saw the FAST Act as a threat. According to this report, Flynn talked about this legislation with the governor’s top aides and urged them to reconsider.
Specifically, he pressed them to reassess whether Panera should be considered a fast food restaurant.
The Change in Legislation for Bread
Eventually, the legislation would be amended. The Service Employees International Union, a group that has supported the FAST Act, agreed to allow restaurants that sold bread an exemption.
New anonymous sources have revealed that the labor group put in this exemption to ensure the governor passed the bill. They believed that, thanks to Newsom’s relationship with Flynn, he would agree to support the bill once Panera was safe from this hike in the minimum wage.
Newsom Also Pushed for Bakery Exemption
It’s also been revealed that the California governor himself pushed for fast-food restaurants that sell their own bread to be exempt from the legislation. Newsom has denied this accusation.
Newsom’s office has since said that this specific exception for fast food franchises with bakeries came about as a “result of countless hours of negotiations with dozens of stakeholders over two years.”
Flynn Denies He’s Responsible
Flynn has also opened up about this new change in legislation. According to him, he had nothing to do with this bread exemption.
However, critics are quick to point out the reporting that revealed Flynn has long been pushing Newsom’s aides behind closed doors. To them, it’s clear that Flynn wanted this legislation changed for his benefit — something he ultimately got.
Newsom and Flynn’s Long History
Newsom and Flynn have long had ties. Both men attended the same high school in a suburb of San Francisco. When Flynn was a senior, Newsom was a freshman.
As the two got older, they would frequently appear to support one another in many ways. Flynn has often donated to Newsom’s political campaigns. In 2022, during Newsom’s reelection campaign, Flynn donated $64,800 to the campaign.
Newsom and Flynn’s Business Ties
Newsom and Flynn may have personal and political ties — but they also have business ties. In 2014, Newsom’s hospitality company managed a Napa Valley resort. Flynn acquired the resort during this time.
This then led to Newsom reporting an income from Flynn’s company in 2014, though the amount remains undisclosed. A year after acquiring the resort, Flynn decided he wouldn’t renew it. During this time, Newsom was California’s lieutenant governor.
Flynn Has Bragged About His Connection to Newsom
Flynn has bragged about his long-standing relationship with Newsom over the years. People familiar with the matter have said that Flynn has been known to boast about his relationship with Newsom to others personally.
In many instances, Flynn allegedly said that he could reach Newsom easily just by texting him. Flynn supposedly said this recently, when Newsom was governor of California.
Panera May Have to Raise Wages Regardless
For some analysts, this exemption was pointless, as they believe that many Panera Breads in California will likely have to raise wages anyway, thanks to where they’re located.
“It’s kind of a silly exemption,” Lorena Gonzalez, a California Labor Federation leader, said. “If you look at where Paneras are located, and their clientele, it’s not as if they’re going to be able to hire people for less.”
