The billionaire donor to California Governor Gavin Newsom, who operates about 20 Panera Bread stores in the state, has reportedly exempted his company from new minimum wage laws. In response to the backlash, the company is raising wages for its employees.
Greg Flynn, commercial real estate investor and founder of Flynn Restaurant Group, the nation’s largest restaurant franchisee, has announced that his California-based company will be closed in line with a new law that increases his hourly wage from $16 to $20. Panera Bread plans to raise wages for employees at 24 stores. According to Bloomberg News.
The raise comes despite the fact that Flynn’s Panera Bread restaurants in California will be exempt from the new law that goes into effect next month.
“To be clear, at no time have I asked for a waiver or special consideration,” Flynn said in a statement to Bloomberg News.
The newspaper has reached out to Newsom, Flynn and Panera Bread for comment.
Last week, Bloomberg News reported that Newsom, a Democrat who has served as governor of the nation’s most populous state since 2019, called for an exemption from the new minimum wage law for restaurants that sell bread as a stand-alone menu item. It was reported that the government had approached members of Congress.
Newsom and Flynn shared long-standing business and personal ties. They both attended the same high school. Mr. Flynn bought a Napa Valley resort managed by Mr. Newsom’s hospitality company in 2014, according to disclosure documents.
Mr. Flynn also donated at least $164,800 to Mr. Newsom’s gubernatorial campaign.
A spokesperson for the governor told Bloomberg News that Newsom’s proposal for an exemption on behalf of Panera Bread is “ridiculous.”
Erin Mellon, Newsom’s communications director, said Panera Bread is not subject to minimum wage laws because it is defined as a “fast casual” restaurant, not “fast food.”
“The exemption was never about Panera. It was always about defining fast food and fast casual,” Mellon told Bloomberg News.
Flynn issued a statement Tuesday saying the pay increase decision was aimed at “attracting and retaining the best team members to deliver the restaurant experience our guests know and love.”
“Regardless of whether AB 1228’s Bakery Exemption applies to our bakery-cafés, starting April 1, all Flinn Group-owned and operated California stores will receive a $20.00 hourly wage before tips. and above,” the statement reads.
AB 1228 is the bill number introduced in the state legislature.
According to reports, Mr. Flynn was one of several business leaders who criticized Mr. Newsom’s plan to raise the minimum wage at fast food chains.
McDonald’s and Chipotle executives warned that the new law would force California restaurants to pass on higher labor costs to consumers in the form of higher prices on key menu items.
Mr. Flynn told Bloomberg News that he had no role in creating the bread exemption to Mr. Newsom’s minimum wage law.
But Flynn reportedly argued that Panera Bread is not a fast food chain and lobbied Newsom’s staff to exempt it from the law.
Flynn confirmed to Bloomberg News that they had “actually met.” [Newsom’s] “Staff members are meeting in groups with other restaurant owners,” he said, but denied personally lobbying the governor.
“This bill was the result of countless hours of negotiations with dozens of stakeholders over two years,” a Newsom spokesperson told the Post last week.
“As is expected when a policy with this outcome passes through the Legislature, staff in the Governor’s Office met with dozens of management and labor union representatives.”
