Controversy Swirls Around Alleged Secret Deals Behind California’s Fast Food Law Exemption

Controversy Swirls Around Alleged Secret Deals Behind California’s Fast Food Law Exemption

California Gov. Gavin Newsom speaks in Los Angeles on Jan. 3, 2024. (John Fredricks/The Epoch Times)

Travis Gillmore

Travis Gillmore

3/13/2024

Updated: 3/13/2024

Following reports by KCRA of non-disclosure agreements—also known as NDAs—and backroom discussions involving exemptions added to a new California law regulating the fast-food industry, some lawmakers are calling for an investigation of records related to the issue.
Republican caucus leaders from the Senate and Assembly sent a letter to Gov. Gavin Newsom March 7 requesting access to public records involving communications between the governor’s office and stakeholders interested in the bill.
“A close acquaintance of yours, major donor to your campaign, and owner of dozens of Panera Bread franchises is poised to benefit from a narrowly tailored exemption to Assembly Bill 1228, raising serious questions about the integrity of the process by which the exemption and the law as a whole were crafted,” the letter reads.
A sign is posted in front of a Panera Bread restaurant in Novato, Calif., on Nov. 1, 2023. (Justin Sullivan/Getty Images)

A sign is posted in front of a Panera Bread restaurant in Novato, Calif., on Nov. 1, 2023. (Justin Sullivan/Getty Images)

Also at issue are exemptions added to AB 1228—which, among other things, raised the minimum wage to $20 per hour starting April 1 for national fast-food chains operating in California—with some claiming the amendments benefitted Panera Bread after Bloomberg reported the allegation Feb. 28.
Representatives for Mr. Newsom have steadfastly denied any involvement or wrongdoing, calling “absurd” the idea that a pay-to-play scheme was behind the amendment. They also said that the governor’s office does not use NDAs for any purpose.
“The Governor’s office doesn’t sign NDAs, for legislation or anything else—so this wouldn’t change anything for our office,” Alex Stack, spokesperson for the governor’s office, told The Epoch Times by email March 12.
Following reports of potential secret agreements, Republican Assemblyman Vince Fong subsequently introduced an amendment to one of his current assembly bills which would invalidate NDAs used in legislative discussions.
Rejecting that secret meetings or campaign donations made to the governor totaling $226,800 since 2018 by billionaire Greg Flynn somehow influenced the legislative process, the governor’s office said no such discussions took place.
“Having said that, we typically don’t weigh in on hypothetical or pending legislation,” Mr. Stack said.
Mr. Flynn owns and operates thousands of restaurants around the world, including dozens of Panera Bread locations in California.
Critics are asking for more details and are demanding to identify the origin of the exemption for establishments that operated a bakery as of September 2023 and offered bread for sale as a stand-alone item, alleging that the governor’s “carefully worded” statement is preventing a better understanding of the issue.
“You have denied that Mr. Flynn had any involvement in writing that policy, however no party to the negotiations has publicly acknowledged a role in writing that policy and its origin remains shrouded in secrecy,” the letter sent to the governor reads.
The author of the bill, Assemblyman Chris Holden, has distanced himself from the amendment and told reporters that others were responsible for the inclusions, though he did not offer any names of individuals or special interest groups.
Republican Minority leader Assemblyman James Gallagher—co-author of the letter—said that full disclosure of all communications related to AB 1228 needs to be made publicly available to restore trust in the legislative process.
“It’s a heck of a coincidence that this deal, crafted in secret, just happens to carve out one of Newsom’s major donors,” Mr. Gallagher said in a Republican Caucus press release. “If Gavin didn’t do anything wrong here, let’s see him prove it. Californians need answers, not just another politician saying, ‘trust me.’”
Senate Republican leader Brian Jones echoed the sentiment and asked the governor to release all records, including texts, phone calls, emails, and other communications between special interests and stakeholders, relating to bills that included bakery exemptions passed in 2022 and 2023, with the governor or his office.
“Obviously, the big group meetings weren’t where the Panera Bread exemption was made,” Mr. Jones said in the press release. “It was in private meetings and conversations. If Governor Newsom is as innocent as he claims, he should be eager to clear his name by handing over these records.”
California Gov. Gavin Newsom signs the fast food bill surrounded by fast food workers at the SEIU Local 721 in Los Angeles, on Sept. 28, 2023. (Courtesy of Office of Governor Gavin Newsom)

California Gov. Gavin Newsom signs the fast food bill surrounded by fast food workers at the SEIU Local 721 in Los Angeles, on Sept. 28, 2023. (Courtesy of Office of Governor Gavin Newsom)

The governor’s office acknowledged they had received the request.
“Our team is processing this records request along with the other requests that have come in,” Mr. Stack said.
Mr. Newsom has until March 17 to respond to the lawmakers’ request, as per state law pertaining to public records requests.
Adding further complication to the matter are differing opinions on whether Panera is exempt from the law. Some, including Panera franchisee Mr. Flynn, suggested the company would be exempt.
“To be clear, at no time did I ask for an exemption or special considerations,” Mr. Flynn told The Epoch Times by email Feb. 29. “In fact, the idea never even occurred to me, and I was surprised when the exemption appeared in the final legislation.”
The governor’s legal team suggested that Panera Bread would not be eligible for the exemption because of its business model—where dough is mixed offsite and brought in for baking.
“Our legal team has reviewed, and it appears Panera is not exempt from the law,” Mr. Stack, spokesperson for the governor, told The Epoch Times by email Feb. 29. “To be exempt under the bakery exemption, the ‘establishment’ must operate a bakery that ‘produces’ bread ‘for sale on the establishment’s premises.’”
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Travis Gillmore

Travis Gillmore

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Travis Gillmore is an avid reader and journalism connoisseur based in California covering finance, politics, the State Capitol, and breaking news for The Epoch Times.

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