Panera Spared $20 Wage After Donation to Newsom

Panera Bread was excluded from California’s new $20-an-hour fast food minimum wage after its billionaire owner donated to Gov. Gavin Newsom’s campaign, the New York Post reports.

After Greg Flynn, the billionaire CEO of Flynn Restaurant Group, publicly denounced the bill, lobbied the Democrat leader, and donated at least $164,800 to Newsom’s campaign, a bread exemption carve-out was added to the legislation.

Originally floated in 2022 and signed into law in September, the Fast Food Accountability and Standards Act (FAST Act) raised the minimum wage of fast-food workers in the state from $16 an hour to $20. It included an exemption for “chains that bake bread and sell it as a standalone item.”

National Restaurant Association CEO Michelle Korsmo said “everyone’s scratching their head” over the bread exemption.

“You may be celebrating or you may be lamenting the bakery exemption,” Korsmo said at an industry conference last fall. “But remember, all of that comes through relationships.”

Newsom, discussing the bill with reporters last month, called the exemption “part of the sausage-making” in politics.

Flynn attended the same high school as Newsom and has been involved in some of Newsom’s business dealings.

With a net worth of $1.1 billion, Flynn is the largest restaurant franchisee in the United States, with thousands of brands in his portfolio, including Applebee’s, Pizza Hut, Taco Bell and Wendy’s. He bought a Napa Valley resort that Newsom’s hospitality firm managed, according to disclosures.

Business owners, including Flynn, have widely criticized the increase in the minimum wage, saying it will result in higher consumer prices and potential layoffs.

Chipotle Chief Financial Officer Jack Hartung told investors on an earnings call earlier this month the chain will have to significantly increase prices to cover higher labor costs.

In October, McDonald’s CEO Chris Kempczinski warned it would be forced to increase its menu items at its California restaurants. In point of fact, McDonald’s is now charging $18 for a Big Mac meal.

Earlier on Wednesday, Panera agreed to pay $2 million to settle a class-action lawsuit accusing it of misleading customers about its menu prices and delivery fees.

The New York Post sought comment from Flynn, Newsom and Panera Bread.