California Democrat Gov. Gavin Newsom's office is denying a report that claimed Panera Bread was excluded from the state's new $20-an-hour fast food minimum wage after its billionaire owner donated to Newsom's campaign.
The Los Angeles Times cited a report from Bloomberg News, which alleged that Greg Flynn, the chief executive of a restaurant group that operates Panera locations, lobbied Newsom's top aides "to reconsider whether fast-casual chains such as Panera should be classified as fast food."
The Bloomberg story alleged that the Service Employees International Union California State Council agreed to exclude restaurants that operate bakeries "as a means of winning the governor's support for the legislation," the Times noted.
The Bloomberg article also said "the rationale was the governor's longstanding relationship with a Panera franchisee."
Newsom's office called the Bloomberg report "absurd."
"The governor never met with Flynn about this bill, and this story is absurd," said Alex Stack, a spokesperson for Newsom. "Our legal team has reviewed, and it appears Panera is not exempt from the law."
Flynn publicly had denounced the bill and donated at least $164,800 to Newsom's campaign, a bread exemption carve-out was added to the legislation, The New York Post reported.
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."
The law stipulates that "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."
The denial by Newsom's office came after California Senate Republican Leader Brian Jones said he wants an investigation into the allegations.
"Put simply, campaign contributions should not buy you carve-outs in legislation," Jones said. "That's crony capitalism. It's corrupt and unacceptable."
Bloomberg did not respond immediately to a request for comment, according to the Times.