California Governor Gavin Newsom speaking at the State of the State address in Sacramento, CA, Mar 8, 2022. (Photo: Sheila Fitzgerald/Shutterstock)
Gov. Newsom’s Office Denies Panera Bread Exemption in Minimum Wage Bill, But Doesn’t Back it Up
This is what corruption in plain sight looks like
By Katy Grimes, February 29, 2024 6:36 pm
Wednesday the Globe reported that California Governor Gavin Newsom exempted a billionaire buddy from California’s new $20 minimum wage law. Billionaire Greg Flynn owns more than two dozen Panera Bread locations in California, as well as Applebee’s, Pizza Hut, Taco Bell, and Wendy’s.
And Flynn has contributed at least $164,800 to Newsom’s political campaigns, the New York Post reported.
“In 2014, Flynn, who is the largest franchisee in the US with thousands of brands including Applebee’s, Pizza Hut, Taco Bell, and Wendy’s, acquired a Napa Valley resort that was managed by Newsom’s hospitality firm, according to disclosure forms.” Ahem. Good friend.
And as the Globe noted, “This is what corruption in plain sight looks like.”
“Flynn has a net worth valued at $1.1 billion, according to the Bloomberg Billionaires Index. He has donated at least $164,800 to Newsom’s campaigns.”
How did the billionaire boys club governor do this? He had it written right into AB 1228 by Assemblyman Chris Holden (D-Los Angeles):
“Fast food restaurant” shall not include an establishment that on September 15, 2023, operates a bakery that produces for sale on the establishment’s premises bread, as defined under Part 136 of Subchapter B of Chapter I of Title 21 of the Code of Federal Regulations, so long as it continues to operate such a bakery. This exemption applies only where the establishment produces for sale bread as a stand-alone menu item, and does not apply if the bread is available for sale solely as part of another menu item. (emphasis the Globe)
Late Thursday afternoon, the Globe and other news outlets received a cheeky email from Newsom’s Deputy Communications Director Alex Stack insisting that all of the media which reported on the preferential treatment of a Newsom donor and old friend was “absurd,” and that “it appears Panera is not exempt from the law.”
Here is Mr. Stack’s email, which was sent to media across the state and country:
Hey there, information below on your inquiry – thanks!
Quote attributable to Alex Stack, spokesperson in the Governor’s Office:
“The Governor never met with Flynn about this bill and this story is absurd. Our legal team has reviewed and it appears Panera is not exempt from the law.”
On background:
This legislation was the result of countless hours of negotiations with dozens of stakeholders over two years. Staff in the Governor’s Office met with dozens of business owners as well as union representatives. The wage increase is not yet even in effect. There’s also a bill currently moving through the legislature that would further change the law.
The Globe immediately replied back, asking about the specific language in the bill which is the Panera Bread business model:
Alex,
thank you for your email. Can you explain the language in the bill which states, (and the attached screenshot):
“Fast food restaurant” shall not include an establishment that on September 15, 2023, operates a bakery that produces for sale on the establishment’s premises bread, as defined under Part 136 of Subchapter B of Chapter I of Title 21 of the Code of Federal Regulations, so long as it continues to operate such a bakery. This exemption applies only where the establishment produces for sale bread as a stand-alone menu item, and does not apply if the bread is available for sale solely as part of another menu item.
And we provided this screen shot of the bill:
Mr. Stack replied:
No problem, here is the analysis we’re referencing:
To be exempt under the bakery exemption, the “establishment” must operate a bakery that “produces” bread “for sale on the establishment’s premises.” Lab. Code § 1474(c)(2). This distinction is relevant because we understand many chain bakeries (such as Panera Bread) mix dough at centralized off-site locations and then ship that dough to their retail locations for baking and sale.
The Globe questioned that “analysis” and asked for a link to it:
I don’t see that in the body of the bill – where is that? Do you have a link?
And that is where the exchange ended.
Notably, just today, Senate Minority Leader Brian W. Jones (R-San Diego) and Senate Republicans shared their concerns about allegations of the Governor’s impropriety when negotiating exemptions from last year’s Fast Food Minimum Wage Bill. Today the Senate heard Assembly Bill 610 (D-Holden, Los Angeles), which will add new exemptions to California’s highly controversial law enacting a $20-per-hour minimum wage for major fast food chains (AB 1228, 2023).
“AB 610’s additional exemptions from this wage-hike law come after a carve-out was provided to bakeries like Panera Bread last year. News reports link this special treatment to an individual Panera franchisee’s relationship – and campaign contributions – to Governor Newsom,” the Senators said in a statement.
The governor’s office is doing damage control for not only imposing the arbitrary $20 per hour minimum wage, harming small business owners and franchisees, but for the gross manipulations in the bill favoring a friend and donor of the Governor. And it’s all over the state and national news now – not a good look.
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Newsom and his clan are the biggest liars. Newsom is so sleazy. It’s obvious Newsom got bought by Flynn, just like Newsom and Democrats are bought by unions.
Gone will be all customers being nice to fast food workers. They will be angry, demanding more, and getting less. Workers will dread going to work, and then quit. All of you on swing, evening, and night shifts will be waiting in 30 minute lines at the drive-through as staff is reduced. And yes, fast food drive through is the ONLY way those workers eat, at night, can’t go to lunch like you can…
Want more than 2 sauces, pay. The pain of this bill, happening so fast, will be exponential. But the people it adversely effects will be unnoticed.
Well THIS is fun, isn’t it? I picture Newsom’s staff running around the office, arms flailing, crying “what do we do now? What do we do now? The story’s gone national! I know! Send a snarky group email to the all the reporters.”
Apparently Asm Chris Holden is sweating bullets too. I heard (on the fly) Ashley Zavala put a microphone in his face and ask some pointed questions. He was rattled and pretty much feigned ignorance. Will have to try to find the link later, if it can be found.
Just repeal the darn thing before it goes into effect, Newsom and lawmakers, for heaven’s sake, before every small business in CA is killed off. And it doesn’t really matter that it doesn’t go in to effect until April 1, by the way. When you own a business you have to plan FAR AHEAD for stumbling blocks like this thrown in your way, and in this case by your own government leaders who are hostile to your efforts, amazingly! Not that Newsom, Holden, or the rest of the Dem/Marxist legislature mega-majority understand such realities of business life.
Here is the Ashley Zavala KCRA report referred to above, where even Asm Chris Holden is ducking fire from this (not well). He’s running for an L.A. County Supervisor seat down here and is obviously not happy. And then of course Newsom is not thrilled either.
https://www.kcra.com/article/california-newsom-ties-to-panera-franchisee-investigation/60030990
What a gift just before an announced recall. This is better than the French Laundry episode. Keep it coming. Thanks
When asked last year about the bread exemption that baffled many, Newsom said, “That’s part of the sausage-making,” declining to elaborate further.(Biz insider)
He thinks he is $licker than a $nicker.
We ALL see he is just a Brown Nosed, Yellow Bellied, Greenback Snortin’ Lizard.
Hey Governor! If it doesn’t apply to Panera as you claim, then who does it apply to and why the specific language?
The donation to Newsom’s recall campaign by his classmate and owner of all those franchises of $164,000, will save the donor over $9 million per year.
It’s curious as to why the Democrat controlled legacy propaganda media seized upon this particular instance of influence peddling that is routine business with Newsom and the rest of the criminal Democrat mafia? Maybe union bosses didn’t like the deal and put up a squawk?
It laughable that Democrat Assemblyman Chris Holden, who wrote the AB 1228 law, trying to claim that he did not know why the exemption was put into the bill. Meanwhile, Holden is trying to amend his original bill with Assembly Bill 610 that would exempt other restaurants from the definition of “fast food restaurant” under the AB 1228 law in the following places:
Those inside Airports, but excluding all military and federally operated facilities
Those connected to or operating inside hotels
Those inside event centers of more than 20,000 square feet or 1,000 seats, including concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.
Those inside theme parks
Those inside public or private museums
Those inside casinos and other gambling establishments
Those located in and operated in conjunction with a building, group of buildings, or campus used for office purposes primarily or exclusively by a single, for-profit corporation and its affiliates.
Those located on land owned by the state, a city or county, or other political subdivision of the state, that is part of a port district or land managed by a port authority or port commission, a public beach, public pier, state park, municipal or regional park, or historic district.
Democrat Assemblyman Chris Holden having to amend his shortsighted abomination Assembly Bill 1228 is typical of the criminal Democrat mafia who are in cahoots with the labor unions? Holden, the son of former State Senator and LA City Councilman Nate Holden, has lived an entire life of upper class comfort and privilege having been in Democrat politics for years. Holden’s website indicates that he is a former owner of a Subway franchise. One would think that Holden would understand the labor cost pressures that most fast food restaurant owners face? Wonder if that Subway franchise that Holden owned ended up failing because of his lack of business skills?
Are hors-d’œuvres offered at Newsom’s landfill served with Panera products?
Katy, you are a real journalist!
Your the only journalist that printed out the California Labor Code 1474, so we can read the actual law.
I looked it up abut a week ago, trying to figure out how ‘Fast Food’ was defined, leaving all the other workers earning $15 an hour, not $20. I thought the baking thing was really weird, not understanding why.
We the people need to learn how to find and read the laws that are being passed.
Gavin is pissing on us all, and telling us it’s just raining.
Chris Micheli of this paper, has written many articles that explain how the legislative process works, but he doesn’t get any love for his effort, meaning he doesn’t get the comments like this article does.
Trying to find a law and read it is a TIME consuming process, kind’a like chewing tin foil.
Here is a link for all to try and find this stuff.
https://leginfo.legislature.ca.gov/
CA Labor Code, Div 2, Part 4.5, 1474, (c) paragraph (2)
I hope I wrote that correctly……