As we reported, California recently passed a controversial fast-food law that will require franchisees to instate a $20-an-hour minimum wage, which will inevitably send prices for consumers even higher. It was then revealed that the chain Panera Bread got a special carveout exempting it from the requirement – and that the billionaire owner of multiple franchises in the state, Greg Flynn, also happens to be a long-time friend to Gov. Gavin Newsom and a big donor. (The carveout exempts “chains that bake bread and sell it as a standalone item.” Um, why?)

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Panera Bread Exempt From $20 Per Hour CA Minimum Wage Law, Because Newsom Protects His Wealthy Buddies


But the story and the whiff of corruption surrounding it get even worse, according to a report by KCRA Channel 3 Sacramento. The article alleges that the bill was negotiated in secret and that a powerful union demanded that the participating parties sign non-disclosure agreements. So much for transparency.

The allegations are jaw-dropping:

Sources close to the negotiations said in the summer of 2023, the powerful Service Employees International Union required the other groups at the negotiating table to sign non-disclosure agreements, also known as NDAs. An NDA is a legally binding agreement that forces those involved to keep discussions confidential. SEIU has not responded to repeated requests for comment.

My first question is, how the heck is that legal? This is our taxpayer money at work, yet they’re keeping secret the details of how this terrible measure was even agreed to?

According to the report, nobody’s talking:

Sources within the fast food industry told KCRA 3 that when they sought information from the industry’s leaders at the negotiating table in 2023, they were told the information could not be disclosed because of the NDAs.

Along with SEIU, sources told KCRA 3 the final negotiators included representatives from McDonald’s, YUM! Brands, the International Franchise Association, and the National Restaurant Association.

Matthew Haller, the president of the IFA, declined to comment. The other groups did not respond to repeated requests for comment over the course of several days.

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McGeorge School of Law Professor Chris Micheli said that although what they did was technically legal, he found it unprecedented: 

“It’s unprecedented in my mind because I’ve never heard of anyone using an NDA when it comes to legislative negotiations,” Micheli said. “I think the concern we should have is a potential lack of transparency and disclosure. Remember, the lawmaking process is being done on behalf of the people of California.”

CA Rep. Kevin Kiley called these types of shenanigans plain old corruption:

Republicans in the state legislature certainly have taken notice and are demanding that Newsom come clean about the Panera carveout:

“If Gavin [Newsom] didn’t do anything wrong here, let’s see him prove it,’ said State Assembly Republican Leader James Gallagher. 

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This bill, like so much of the rest of the garbage that comes out of the California legislature, is bad for Golden State consumers and was yet another alarming overreach by deep-blue lawmakers. However, it may turn out the contents of the measure aren’t even the worst thing about it – how it was negotiated in the first place and why a friend of Newsom got such a sweet exemption might even be disturbing. 


See also:

California Pizza Hut Operators Laying off All Delivery Drivers Due to Mandated Wage Increase

McDonald’s Franchisees Slam Draconian CA Fast Food Bill, ‘Will Result in a Devastating Financial Blow’