Panera Bread Faces Boycott Calls

Some Panera Bread fans plan to stop eating at the chain's restaurants following claims it got an exemption on raising the minimum wage because of its owner's relationship with California Governor Gavin Newsom.

The state's minimum wage went up to $16 in January and will increase to $20 for fast-food workers in April, but it was the chains that got an exemption that raised eyebrows. Restaurants that sell bread as a stand-alone item will not have to raise their minimum wage, including Panera, a chain of fast-casual bakery cafés.

A Bloomberg report alleged that the exemption happened because Newsom has a close relationship with Panera's owner, Greg Flynn, a billionaire and major donor to the governor.

Panera falls under Flynn's umbrella company, the Flynn Restaurant Group, which also operates Wendy's, Arby's, Taco Bell, Pizza Hut and Applebee's. The Flynn Restaurant Group runs around 2,600 stores across the country and Panera has 24 locations in California.

Newsweek contacted Panera by email for comment.

Newsom's spokesperson, Alex Stack, told Newsweek the "governor never met with Flynn about this bill and this story is absurd."

"So now I have to boycott Panera Bread too? No problem. Their menu is lame," wrote one person on X (formerly Twitter).

Another added: "Boycott Panera Bread?"

A third wrote: "Time to Boycott 'Panera restaurants.' They need to pay their workers too."

A fourth agreed, saying: "Time to boycott Panera."

A Newsom spokesperson also told Newsweek on Wednesday that the minimum wage law "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, as is expected when policies of this consequence are moving through the Legislature," Stack said.

He added the governor's legal team does not believe Panera is exempt from the new law.

To qualify for the exemption, restaurants must bake their bread on-site, but because Panera mixes dough at an off-site location and then sends it to its restaurants to be baked, this likely means it would still have to raise its minimum wage for workers.

The Bloomberg report alleged that Newsom "pushed for" an exemption for restaurants such as Panera to get an exemption because of his connection to Flynn. Referring to unnamed sources, the article, which was based on anonymous sources, said they attended the same high school and maintained a professional relationship over the years.

Flynn donated $100,000 to Newsom to fight off a failed Republican recall effort in 2021 and also donated $64,800 to his 2022 reelection bid, according to reports.

Newsom, who was previously the mayor of San Francisco, is often touted as a potential Democratic presidential candidate and a front-runner if President Joe Biden is not the party's nominee.

Flynn spoke out about the new law over minimum wage saying it was "true" he opposed it, "as did thousands of other California restaurant owners."

"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 told KCRA 3 in a statement on Thursday.

"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."

Update 03/04/24, 2:50 a.m. ET: This article was updated to include comment from Stack and Flynn.