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Republican California lawmakers on Thursday called for an investigation into Gov. Gavin Newsom’s ties to a billionaire Panera franchisee and the restaurant’s exemption from a new state law that will require major fast-food chains to pay their workers $20 an hour. “He owes everybody an explanation,” Republican State Senate Minority Leader Brian Jones said. Some Republican lawmakers said they had little faith in the ability of California’s Democratic Supermajority Legislature or other top Democrats in state government to investigate the issue. Assemblyman Joe Patterson, R-Rocklin, went as far as to say the FBI should get involved. “Frankly, I don’t think the California Attorney General is capable of doing that,” Patterson said. “I think it has to be an outside agency that investigates this.” Multiple sources who spoke on condition of anonymity have confirmed to KCRA that billionaire franchisee and Newsom donor Greg Flynn influenced Newsom’s push to carve out chains that sell and break bread on-site from the new law in the final weeks of the legislative session in 2022. Newsom’s office has said that it was the result of two years’ worth of negotiations between him and the Legislature. The law goes into effect in April. “The Governor never met with Flynn about this bill & this story is absurd. Our legal team has reviewed and it appears Panera is not exempt,” Newsom’s spokesman Alex Stack said on Thursday. Newsom’s office said the exemption applies to those who produce bread on-site, and said some bakeries, including Panera, mix dough off-site at a centralized location before sending it to their restaurants for baking and sale. Experts note that appearance is up for interpretation, and stakeholders for years have understood it as an exemption. The legislation also does not define the word “produce.” KCRA 3 asked Newsom why the exemption was in there when he signed the law in September of 2023. He said it was “part of the sausage making … part of the negotiations.” Greg Flynn sent KCRA 3 a lengthy statement on Thursday night: “It is true that I opposed AB1228, as did thousands of other California restaurant owners. If the intent of the bill was to address alleged labor code violations in fast food restaurants, then the scope of the law should be limited to true fast food restaurants and not include fast casual restaurants like bakeries, bagel shops, delis, etc. I suggested the bill’s language defining “fast food restaurant” should be amended to exclude fast casual restaurants,” Flynn said. “To be clear, at no time did I ask for an exemption or special considerations. In fact, the idea never even occurred to me and I was surprised when the exemption appeared in the final legislation. Such a narrow exemption has very little practical value. As it applies to all of our peer restaurants in the fast casual segment, we will almost certainly have to offer market value wages in order to attract and retain employees,” Flynn said. “I also never met with Governor Newsom about this bill, though I did meet with his staff in a group meeting with other restaurant owners. And finally, although we attended the same high school, I never met him there and in fact didn’t meet him until decades later,” he said. Democratic Assemblyman Chris Holden, who wrote the law, said he did not know why the exemption was put into the bill. He told reporters on Thursday that despite being the author of the law, he was not part of the negotiation to include the carve-out for bakeries. “It’s my bill, but in terms of the negotiations, it was bringing together the business community and franchisees and franchisors and through the governor’s leadership, it came together and what came out of that came the amendments of the bill,” Holden said. Holden said he was not aware of the relationship between Flynn and Newsom. When KCRA 3 asked if, to the average Californian, Panera’s exemption from the law may appear questionable, Holden replied, “That’s a conversation you’ll have to have with others.”Neither Speaker of the Assembly Robert Rivas nor Senate Pro Tem Mike McGuire have responded to a request for comment. Flynn has not responded to KCRA 3’s request for comment but told Bloomberg he was not involved in the crafting of the exemption. Campaign finance data show Flynn donated $100,000 to Newsom’s campaign to fight his recall in 2021. In 2022, Flynn donated $64,800 to Newsom’s reelection campaign. That includes a $32,400 contribution deposited three months before the law passed with the exemption in 2022, and a $14,800 donation that October after Newsom signed it. Flynn has donated to other state politicians individually, but the majority of his contributions have gone to Newsom. Since 2020, Flynn has made smaller contributions to State Treasurer Fiona Ma and State Sen. Steve Glazer. His most recent contribution was made to Attorney General Rob Bonta for $5,000 in June of 2023. Bonta did not respond to a request for comment. Flynn is the franchisee of dozens of Panera restaurants across Northern California. According to city records, Flynn opened another Panera restaurant within view of the state capitol in Sacramento in December. See more coverage of top California stories here | Download our app.
SACRAMENTO, Calif. —
Republican California lawmakers on Thursday called for an investigation into Gov. Gavin Newsom’s ties to a billionaire Panera franchisee and the restaurant’s exemption from a new state law that will require major fast-food chains to pay their workers $20 an hour.
“He owes everybody an explanation,” Republican State Senate Minority Leader Brian Jones said.
Some Republican lawmakers said they had little faith in the ability of California’s Democratic Supermajority Legislature or other top Democrats in state government to investigate the issue. Assemblyman Joe Patterson, R-Rocklin, went as far as to say the FBI should get involved.
“Frankly, I don’t think the California Attorney General is capable of doing that,” Patterson said. “I think it has to be an outside agency that investigates this.”
Multiple sources who spoke on condition of anonymity have confirmed to KCRA that billionaire franchisee and Newsom donor Greg Flynn influenced Newsom’s push to carve out chains that sell and break bread on-site from the new law in the final weeks of the legislative session in 2022.
Newsom’s office has said that it was the result of two years’ worth of negotiations between him and the Legislature. The law goes into effect in April.
“The Governor never met with Flynn about this bill & this story is absurd. Our legal team has reviewed and it appears Panera is not exempt,” Newsom’s spokesman Alex Stack said on Thursday. Newsom’s office said the exemption applies to those who produce bread on-site, and said some bakeries, including Panera, mix dough off-site at a centralized location before sending it to their restaurants for baking and sale. Experts note that appearance is up for interpretation, and stakeholders for years have understood it as an exemption. The legislation also does not define the word “produce.”
KCRA 3 asked Newsom why the exemption was in there when he signed the law in September of 2023. He said it was “part of the sausage making … part of the negotiations.”
Greg Flynn sent KCRA 3 a lengthy statement on Thursday night:
“It is true that I opposed AB1228, as did thousands of other California restaurant owners. If the intent of the bill was to address alleged labor code violations in fast food restaurants, then the scope of the law should be limited to true fast food restaurants and not include fast casual restaurants like bakeries, bagel shops, delis, etc. I suggested the bill’s language defining “fast food restaurant” should be amended to exclude fast casual restaurants,” Flynn said.
“To be clear, at no time did I ask for an exemption or special considerations. In fact, the idea never even occurred to me and I was surprised when the exemption appeared in the final legislation. Such a narrow exemption has very little practical value. As it applies to all of our peer restaurants in the fast casual segment, we will almost certainly have to offer market value wages in order to attract and retain employees,” Flynn said.
“I also never met with Governor Newsom about this bill, though I did meet with his staff in a group meeting with other restaurant owners. And finally, although we attended the same high school, I never met him there and in fact didn’t meet him until decades later,” he said.
Democratic Assemblyman Chris Holden, who wrote the law, said he did not know why the exemption was put into the bill. He told reporters on Thursday that despite being the author of the law, he was not part of the negotiation to include the carve-out for bakeries.
“It’s my bill, but in terms of the negotiations, it was bringing together the business community and franchisees and franchisors and through the governor’s leadership, it came together and what came out of that came the amendments of the bill,” Holden said.
Holden said he was not aware of the relationship between Flynn and Newsom.
When KCRA 3 asked if, to the average Californian, Panera’s exemption from the law may appear questionable, Holden replied, “That’s a conversation you’ll have to have with others.”
Neither Speaker of the Assembly Robert Rivas nor Senate Pro Tem Mike McGuire have responded to a request for comment. Flynn has not responded to KCRA 3’s request for comment but told Bloomberg he was not involved in the crafting of the exemption.
Campaign finance data show Flynn donated $100,000 to Newsom’s campaign to fight his recall in 2021. In 2022, Flynn donated $64,800 to Newsom’s reelection campaign.
That includes a $32,400 contribution deposited three months before the law passed with the exemption in 2022, and a $14,800 donation that October after Newsom signed it.
Flynn has donated to other state politicians individually, but the majority of his contributions have gone to Newsom. Since 2020, Flynn has made smaller contributions to State Treasurer Fiona Ma and State Sen. Steve Glazer. His most recent contribution was made to Attorney General Rob Bonta for $5,000 in June of 2023. Bonta did not respond to a request for comment.
Flynn is the franchisee of dozens of Panera restaurants across Northern California. According to city records, Flynn opened another Panera restaurant within view of the state capitol in Sacramento in December.
See more coverage of top California stories here | Download our app.
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