Democratic California Gov. Gavin Newsom and one of his longtime billionaire donors are disputing a recent report suggesting the two were benefiting from an exemption to the state's new $20 minimum wage for the fast-food industry, which is expected to take effect in April.
A Bloomberg report published this week said that donor Greg Flynn was expected to reap the benefit of the obscure exemption to the new regulation that would allow the two dozen Panera Bread restaurants he owns across the state to continue paying lower wages, potentially saving him hundreds of thousands of dollars per year.
According to the report, Newsom pushed for the exemption, which allows restaurants baking and selling bread as a standalone item to continue paying the current rate of $16 to their employees.
"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," Newsom spokesperson Alex Stack told Fox News Digital. He said the governor's legal team concluded Panera Bread was not exempt because it mixes its dough off-site before baking it at the restaurant locations.
Newsom's office also said the legislation was the result of countless hours of negotiations with dozens of stakeholders over two years, and that staff met with dozens of business owners, as well as union representatives.
Flynn wrote in a statement to Fox News Digital that it was true he opposed, along with "thousands of other California restaurant owners," the law that originally included the new regulations, known as the FAST Act, which the Bloomberg report said he lobbied Newsom's office to oppose.
"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," he wrote. "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.
"I also never met with Gov. 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."
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Flynn also wrote that he suggested the bill's language be amended to exclude "fast casual restaurants" from being defined as fast-food restaurants.
The report that Flynn was benefiting from the exemption sparked outrage and calls for an outside probe from California Republicans.
