California's fast food law exempts Panera Gov. Newsom's relationship | Hacker News Reader

California's fast food law exempts Panera Gov. Newsom's relationship

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67 pointsBender79 comments

This story makes no sense. First, Newsom doesn't write laws; the legislature writes laws. Second, the title says Panera but the article says Panera Bread and chain restaurants like it. Lastly, it says lawmakers are calling for an investigation into the deal, an investigation into a law they wrote, not Newsom.

Newsom even pointed out that Panera wasn't exempt.

https://www.sfchronicle.com/politics/article/panera-newsom-w...

Clickbait works though. Even on HN.

The problem is that it is consistent with the average person's understanding of politicians.

Newsom was caught in several situations of "rules for thee, but not for me" during COVID, the conflict of interest that is congressional stock trading was defended as a right, and supreme court justices are openly taking bribes without consequences.

Citizens united said the rich can spend as much money as they want to get their standard-bearer elected.

Even if it's not true, it's consistent, so it's not "clickbait working" so much as a story that completely makes sense given the current magnitude of corruption in American politics.

Newsom is a future presidential candidate. Misinformation, scandals, accusations of fraud, etc. will be the norm for the next four years.

This isn't a new thing in presidential politics, nor specific to either party. Politics is a contact sport, and the competitors play the long game.

It's more than a little bit disingenuous to suggest that it's misinformation to link Newsom to a bill he claims to have collaborated on. Besides, with PG&E reporting record profits and the CPUC granting PG&E's every rate hike you really don't need to resort to misinformation. Folks just have to start waving their utility bills around if Newsom is dumb enough to run for president.

I'm a little surprised his tenure as governor is turning out this way. As mayor he definitely dialed down the rampant cronyism and corruption that defined Brown's reign.

https://la.eater.com/2024/3/1/24087062/california-fast-food-...

Yeah I already addressed that. Newsom's trying to walk back his pay to play bullshit by claiming Panera doesn't produce bread on site. If you believe that, well, I've a bridge in Brooklyn for sale. If California tries to enforce their strict definition of produce, you can bet Newsom's buddy will litigate (and that nobody will like the outcome). More likely California will look the other way when Panera refuses to up their wages.

Think about it critically for a sec without your partisan goggles. We're talking about a hyper specific exemption (60+ locations, sells bread produced on-site as a standalone product since at least 2022 or whenever). If it doesn't apply to Panera, who does it apply to? It won't apply to McDonald's or Subway because bread has never been a standalone item there. It won't apply to the Lee's by my place because there aren't 60 of them. Certainly Newsom and the legislature wouldn't have spent the effort to carve out an exemption that applies to nobody.

Perhaps that article is not very good.

https://www.politico.com/news/2024/02/29/gavin-newsom-fast-f...

"The bill in question emerged from months of negotiations, presided over by Newsom’s office, between organized labor and the fast food industry. The two sides ultimately forged a truce that averted a ballot fight over a referendum challenging a more sweeping fast food labor law that the governor signed in 2022."

The lawmakers calling for the investigation are Republicans and presumably didn't vote for it.

> First, Newsom doesn't write laws;

his office claimed the law was the result of “negotiations with stakeholders” so sounds like he’s involved when it’s a success, but didn’t do nothing when there’s a scandal

One can arbitrate without having a stake.

Eg: y'all come to my office and work this out.

It signals the Gov cares even if not the author of the deal.

(Viewing this from one angle).

> First, Newsom doesn't write laws; the legislature writes laws

The governor has to sign a bill or it won’t become a law. Just because he doesn’t write the bill doesn’t mean he doesn’t have input. He could easily convey the message, “Add _____ or I’m not signing it”.

  Newsom doesn't write laws

No, but he's going to lobby hard for the provisions he wants under the threat of a veto.

  the title says Panera but the article says Panera Bread and
  chain restaurants like it.

Read the guidelines and tell me how many stores other than Panera would fall into this exemption. Hint: it's not just producing bread on site it's having done so since before Sep 2023. This is 100% a sleazy Panera exemption.

  Newsom even pointed out that Panera wasn't exempt.

Yeah because he's trying to claim Panera doesn't make bread on site. The text of the law says "produces for sale bread" and team newsom is trying to claim that using dough from elsewhere doesn't count as producing. Your best case scenario is that Panera litigates this.

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

"Stack said lawyers for the governor’s office determined that Panera doesn’t meet the standard for a business that “produces” bread “for sale on the establishment’s premises” because “many chain bakeries (such as Panera Bread) mix dough at centralized off-site locations and then ship that dough to their retail locations for baking and sale.”

1. They are claiming that because Panera generally mixes dough at central locations that they don't "produce" bread by baking it at the retail locations. It is not clear that this was their original intent and not a recently invented rationalization to obscure the connection to Panera.

2. The lawmakers that are calling for an investigation into the deal aren't the same lawmakers that write the deal are they?

3. The governor can obviously influence legislation including but not limited to his power to veto it.

the law references a categorization in federal code

so unless the law is changed or that organization doesnt file or fit under the federal code

then they are not obligated to pay employees $20/hr aside from by market forces

everything else is partisan pontificating or playing defense

I've read both articles, and I don't buy your characterization of the situation.

The primary question I have is: "Did Newsom use his power to try to benefit his friend?"

Both articles, to me, say "yes, he attempted to use his authority to benefit his friend." The article you linked, based on how I read it, says that he attempted to help his friend with his office, he was caught by journalists, and backed out because the cost/benefit changed due to journalist due diligence.

Here is the bill in question: https://legiscan.com/CA/text/AB257/id/2605912

Here is the core of what defines fast food:

(a) “Fast food chain” means a set of restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services.

Here is the exemption:

(i) An establishment that on September 1, 2022, operates a bakery that produces for sale on the establishment’s premises bread as defined under Part 136 of Subchapter B of Chapter I of Title 21 of the Code of Federal Regulations shall not be considered a fast food restaurant, so long as it continues to operate such a bakery. 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.

I could be convinced that my interpretation is less plausible if you can justify that exemption in a way that makes sense including why the date matters.

In the original article Newsom gave a non-answer. When politicians give a non answer, I think we have a responsibility to assume the worst, otherwise we are encouraging politicians to continue giving non-answers.

The date matters because it was signed into law Sept 5, 2022. Perhaps you can explain why this article now, in 2024?

I can't explain the exemption although it was for a sector and not a corporation as the title implied. Further, Newsom disputes whether it even applies to Panera.

Instead that explanation, why bakeries, isn't incumbent on me but rather on the objecting journalist. The truth is out there. The hearings were open and a record is available. Or maybe just "California's fast food law exempts Panera because of Gov. Newsom's relationship with billionaire franchisee" will do.

The date is a signifier that it is a loophole with a low bar, otherwise something more directly related to being a bakery would be there. Subway, for example, would be able to bake a few bags of bread per day and put them on the counter top for sell and call themselves a bakery. That's a clear indication it's not the selling of bread baked on premises that makes a place a bakery or not.

> Perhaps you can explain why this article now, in 2024?

"As California prepares to implement a new law that requires major fast food chains to pay workers a minimum of $20 an hour starting in April..."

> I can't explain the exemption although it was for a sector and not a corporation as the title implied.

because if it was a corporation that would be an obvious and odious conflict of interest. Exempting a sector offers plausible deniability. Plausible deniability's purpose is to help people who want to believe something believe it.

> Further, Newsom disputes whether it even applies to Panera.

Because he was caught, not because that wasn't the intent.

> The truth is out there. The hearings were open and a record is available.

I don't think we'll ever know, and I would need at least one example of these negotiations to believe that it's possible to make that determination.

> California's fast food law exempts Panera because of Gov. Newsom's relationship with billionaire franchisee

I think he had the means, the motive, and the opportunity. I think journalistic due diligence mitigated what would other wise be an abuse of office.

Most of all I find the dated bakery exemption dubious and the most simple explanation for a dated loophole, to me, is that it was meant to target a single company while still retaining some amount of plausible deniability.

https://en.wikipedia.org/wiki/Plausible_deniability

LOL as Panera loses its employees to the competition that are forced to pay 8+ dollars more per hour and at a more rapid pace thereafter! And no one wants to take any position at Panera if they can get higher paying food service work across the street! Most workers will just find other employers that pay more and thus the experiment will start for Panera on how the prevailing wage levels in the Golden Bear state will force Panera to raise wages regardless!

If that was true, it would have happened without the law getting involved. The implications of this are obvious from some basic supply-demand logic.

Say before the law came into effect there were 100 people, 100 jobs and the market rate of pay is $12/hr.

Now there going to be more people willing to take work (say, 110 people), probably less jobs - say 99 for the sake of argument and the market rate is set to $20/hr. Panera will still fill the same number of positions and likely pay a little less than $12 (maybe $10). They can also offer lower prices so they'll probably do roaring business and make more profit.

A carve out won't hurt Panera. It'll make them much more profitable.

Doesn’t that assume that unlimited jobs are available and every worker has a choice?

In reality the $20 jobs will fill first and remaining might have to take $12 jobs. No?

Sure — those jobs will go first to the best employees.

And Panera will become that place where you know the quality and staff are worse, in both the “get my order wrong” and “seem to have a drug problem” senses.

Panera will then have to pay above market to attract quality back when they’ve developed a toxic workplace culture. All while customers are shifting habits.

Does this law impact the ability of unionized Panera workers to bargain for wages at the same minimum wage floor? There are 188 Panera Bread locations in California [1]. More Starbucks locations have unionized nationwide than that [2].

[1] https://www.panerabread.com/en-us/cafe/locations/ca

[2] https://unionelections.org/data/starbucks/

"We can't get a job at any place offering $20/hr, we can only get a job at this place offering $1x/hr. I know, lets start a fight with them!"

This strategy will result in many of them becoming unemployed. Although the idea that previously fine employees are suddenly unfit for work is weird and probably wrong, there is little question that there will be people working at Panera who literally can't get a job at higher wages. This place will be their only hope. Biting the invisible hand of the market that feeds them is a terrible plan, they're better off upskilling as best they can and trying to get a job at $20/hr somewhere else.

Good news! Newsom’s team is stating there is no Panera exception. If because of public backlash, all the better.

> Newsom’s legal team has concluded that would not apply to businesses, like many Panera locations, that mix dough at one location and then bake it at stores.

https://www.politico.com/news/2024/02/29/gavin-newsom-fast-f...

I think the stranger assumption is that all of these fast food chains won't just add some simple bread to their menu. Bread is incredibly easy/cheap to make.

They cannot:

they will always find people who are desperate. this will turn into a retention problem for them in the long run. it's unfortunate that the CA governor is married to some bad apples (PGE is another one).

Except other places will cut jobs or raise prices (thus reduce demand), so the jobs that are still around at $20/hour will be for fewer hours.

Everyone is rightfully outraged if Panera gets an exception to the minimum wage, but why have a separate minimum wage for fast food workers in the first place? Isn't that similarly arbitrary?

Yeah, IIRC the CA legislature was going to pass a law requiring franchisers (McDonald’s etc.) to assume liability for anything that happened at franchisee-owned locations. In turn, the franchisers threatened to put a ballot initiative in place to allow voters to have the last word. Then the parties came to the table and this was the compromise.

I am fascinated to know what the bargain was here.

Surely it wasn't as simple as "I helped fund your campaign, this is that favor." The direct donation amount doesn't seem nearly substantial enough.

Agreement not to support or fund inevitable repeal referendum? SuperPAC funding?

The owner is an old friend, I think they might have gone to the same school.

Edit: found a source here

> Flynn, who attended the same high school as Newsom, has been involved in business dealings with the California governor, according to Bloomberg News.

https://nypost.com/2024/02/28/business/panera-bread-exempt-f...

I mean genuinely, in my limited but non trivial experience here, it’s that simple. Is just generally not this out in the open, and brazen.

That says a lot about where we have gotten as a country, that brazen corruption is overlooked to such a degree that people do not feel that it affects them.

The Overton window in action

What are you talking about when you say "people do not feel like it affects them"? Because all across the political spectrum people are furious about this today.

I was recently talking with one of my close friends who has been a state senator for about a decade now.

They said that, whereas when they got into politics seriously in the 2000s there was an expectation that you were elected to serve your constituents and if “something happened to fall off the table into your pocket” it was kind of overlooked.

Compare this to now, where if you do not come into an election with corporate sponsorship, with increasingly specific grift-based policy goals, the corporate money lobby will just over power you to stay off the ballot or crush you with propaganda

Kari Lake a Republican talked about how she was approached recently to basically no response anywhere.

The most intriguing part is that you not only have to bake your own bread, you also have to sell it standalone (not just part of a burger/sub). Seems like it would be very easy for Subway to start selling their store-baked bread standalone — have they done this already, or are they paying the new wage?

I think it was done for donuts shops.

You have to have been selling bread this way when the law took effect, is my understanding.. so, you can't just start handing out loaves of bread tomorrow and then claim the exemption.

It's not that just one provision of the law appears corrupt, it's that so many other peculiar provisions point to corruption as well, as if being someone who retailed bread in 2023 makes you different from someone who does so in 2024.

Interesting, it does look like you have to have been baking bread as of 2022, but the part about selling it separately is phrased in the present tense. This has two effects:

• Subway-type restaurants could be exempt if they start selling bread standalone, so long as they were baking bread in 2022

• any restaurant/donut shop/etc. would not qualify for the exemption if they were not operating in 2022.

I have not read the whole law, just this part:

> (i) An establishment that on September 1, 2022, operates a bakery that produces for sale on the establishment’s premises bread as defined under Part 136 of Subchapter B of Chapter I of Title 21 of the Code of Federal Regulations shall not be considered a fast food restaurant, so long as it continues to operate such a bakery. 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. [1]

1: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

Okay, so if you go to Part 136 of that CFR reference you arrive here:

    The word bread when used in the name of the food means the unit weighs one-half pound or more after cooling.

So, how much does a subway loaf weigh?

[0]: https://www.ecfr.gov/current/title-21/chapter-I/subchapter-B...

Good question, but how would donut shops fare under this rule? Another commenter below suggested this was the reason for the carveout. I can’t imagine a donut that weighs that much! Maybe a bear claw filled with nuts?

I'm not sure what the exact timeline was, but they are selling pretzels and churros now. Part of me would be surprised if this was due to a single state's laws, but it also wouldn't be too surprising if it was for a legal foothold. Seems like an easy gamble.

They are provided by other companies (Auntie Anne's for the pretzels, Cinnabon for the churros), which seems like both a reason they wouldn't be exempt (they don't "produce" it), and a reason for doing it (it's easier and quicker to have an established company/companies provide it to get it done before having to train people and update POS's). Confusingly, I could have always bought a loaf of sandwich bread from Subway - I can just ask for a sandwich with nothing on it, and the employees don't care. I don't believe they actually mix ingredients to make a dough that they then bake, though.

[dupe]

Discussion yesterday:

Why Is Panera Exempted from California's New Minimum Wage Law?

https://news.ycombinator.com/item?id=39542601

So, nothing will change except now every fast food place in California will bake its own bread. Look out for McDonald's fresh bread, west coasters.

The exemption only applies to businesses that specifically only make bread and nothing else. Even bagels disqualify the exemption. It was found that the exemption will only apply to Panera, giving them an advantage over everyone else having to pay $20/hr whereas Panera will continue paying $11.70/hr. Additional discussion on Breaking Points [1].

[1] - https://youtu.be/2YZ43uU4Z8s?&t=268

Why would anyone take a job at 11.70/hr when one at 20$/hour is available? This makes zero sense.

Right. I don’t understand why people keep choosing to be poor and in need /s

Are we living in our own little bubble much?

The lowest paying jobs in expensive cities are hard to fill because other jobs exist. If all jobs are filled then people the best / average / slightly below average will have a choice while the worst won't.

Because the $20/hour price is artificial, so there aren't enough of them. If the price were not artificial it would balance until the number of jobs = number of seekers. But it won't, instead it becomes a lottery of sorts.

It also means far less job security for anyone who has such a job, because there are so many seekers employers will hold all the power, and will fire people easily. So it's also a high-stress job, but presumably worth it for that pay.

Which also answers your question: People will take lower paying jobs in order to have a bit more flexibility to request time off, or to make mistakes without fear.

normally I would agree with you, but the 20$/hr is required across the board for all fast food workers, correct? so, it's not like you get to choose how much you pay a worker (you may choose to have less workers for example but you cannot pay less than 20).

Are there no other jobs in California that pay less?

If this is a global floor in California, it's going to lead to some interesting things.

It will have the effect of flattening out the income of a huge chunk of society. A huge number of people in California will all have identical income.

It will be cheaper to make things across the border and import them. So the kinds of jobs needed will change. California will lose local jobs but gain jobs having to do with coordination and importation.

Positions aren't infinite. Even if you want the $20/hr job, so do a lot of other people.

Huh? That doesn't sound correct, and isn't supported by the video you linked. Panera doesn't just make bread. They have a huge menu that includes bagels, pasta dishes, etc.

That is completely corrupt. The government is picking winners and losers. What about sub shops that bake their own rolls?

Well, at the very least we will see employees leaving Panera in droves and I'd bet they'd be forced to increase their wages to just keep the doors open.

Not when other places are closing because they're forced to raise prices to still make a profit while paying higher wages, meaning less customers.

> The exemption only applies to businesses that specifically only make bread and nothing else. Even bagels disqualify the exemption

This is not accurate. The exemption applies to businesses that sell bread starting before September 2023. The exemption excludes restaurants that sell bagels and/or croissants but who don't sell bread.

https://www.nationalreview.com/corner/pay-a-higher-minimum-w...

So if I start a bakery in 2024 I am disadvantaged? What if Panera starts a new location in 2024? A new counter at an existing location?

I say with the sincerest sadness that every welfare scheme generates boundary problems like this. But this law comes across as particularly capricious.

I'm not sure that's correct.

> An establishment that on September 1, 2022, operates a bakery that produces for sale on the establishment’s premises bread as defined under Part 136 of Subchapter B of Chapter I of Title 21 of the Code of Federal Regulations shall not be considered a fast food restaurant, so long as it continues to operate such a bakery. 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.

Jimmy John's would also be exempt by this wording since they sell their old bread (or at least I think they do). I guess Subway wouldn't since I don't think you can buy just bread from them.

Side note, Jimmy John's day old bread fed me through college.

If you're poor and there's a JJ's nearby, hard to get better.

Just walk up to the counter and ask if they have day old bread. I think you might have to pay in cash? Vaguely remember it being so cheap that card didn't make sense.

The carveout only applies to companies that met the criteria prior to a certain date.

They really worked hard to close loopholes that would have allowed any other company to use it.

Try the new McBread today!

As a bay area resident:

I don't think this carveout materially amounts to much. There are sooooo many open fast food positions and if they all go to $20 (currently at $17 in my area) then panera has to keep up. It is still a free option though.

However, that answer from Newsom was piss poor. He says "it's just part of the sausage making" and negotiation process. Ultimately dodging the question since no substance on motivation was supplied as to why baking bread makes things different.

He's not the kinda guy I want as a state leader and governor. Unfortunately, we never get any exciting competition against the scumbag either.

I’m confused. Was this an executive order or did it come out of the legislature? If the latter, then why does Newsom’s comment bother you so much? There are probably a lot of weird exemption in there, especially since it goes after an industry, you have to define fast food now.

He got up on that stand to answer questions. If he’s going to go up and proceed to dodge questions, then he needs to just go home and stop scheduling press events. I don’t want a coward for a leader.

It all felt weird anyways. Why would bakeries be considered fast food, or why was fast food singled out compared to other minimum wage jobs? This seems like bad legislation when they should have just hiked the minimum wage (which is probably already effectively over $20/hour in most CA cities).

lol weren’t there tens of people competing against him in a recent recall election?

Seems more like people are more scared of real change. Quite literally heard friends saying they didn’t have a choice but to vote for Newsome, because Larry Elder was a white supremacist. Couldn’t believe they were saying that with a straight face during that election lol

https://www.latimes.com/california/story/2021-08-20/recall-c...

Ultimately, elections in California are highly managed. The media is powerful, laws favor vote harvester, which are well organized. Then you have the weird primary laws, which just exempt other parties from the general elections. You aren’t ever getting out of Newsome or the next one like him lol

I actually spent a fair chunk of my afternoon researching the candidates during that election.

I don’t think elder is a white supremacist and personally I also would consider myself “tough on crime”.

But his views on the situation are also just kinda dumb (and I prefer newsom over this guy).

Cops in this country, including California, are systematically fucked. Maybe a little racist, maybe a lot racist. But for example, check the recent story where the cop started shooting because he heard an acorn drop.

Yeah I’m not saying one way or another who was better tbh. I’m just pointing out that specific case as a way the media was supporting Newsome particularly there.

If every challenger is either ignored or painted in a bad light; then people won’t know of good options.

Personally, not sure Newsome is better or worse; but overall California is worse than when I left in 2017.

Wait till you hear how close Newsom is with PG&E. https://youtu.be/HgHMKq3igEw?feature=shared

I hope businesses advertise that this law applies to them, so that customers can prioritize them over those that don’t.

He's a typical politician.

So for people who don't understand how government works:

The governor does not create legislation, they simply sign or veto legislation the legislative branch passes.

Another thing the story doesn't acknowledge: the donor in question just owns a lot of fast food franchises, including non-Panera ones.

Let's be clear, it's very suspicious to me that this story is suddenly getting a lot of coverage but not stating the origin of the exemption.

But the other thing is billionaires donate a lot of money to many politicians, hell non-billionaires donate a lot of money to many politicians. Given the gross excess of donations in US politics I feel you could create more or less any conspiracy or corruption story you want to for almost any legislator and legislation combo you like.

> The governor does not create legislation

The governor is NOT ENTITLED to create legislation. That doesn't mean it's somehow physically unrealizable in our universe for him to draft the law and then submit it to the legislative branch and for them to "rubber stamp" it.

the number of people saying this in this thread is what feels inorganic to me. what created this era where people are eager to come to the defense of incumbents?

what's wrong is wrong; this isn't good policy. someone reported on it, people are finding out and they don't like it.

Yeah, top comment is also sus. Are there HN upvoting/downvoting farms?

because people are responding to the sudden surge of this one story, so keep seeing exactly the same near identical story from multiple different sources on multiple different sites, so have have already gotten tired of the same BS everywhere.

As far as I can make out this piece of (still BS) legislation was present for independent bakeries, and that happens to also cover outlets like Panera. But people who own multiple franchises have lots of money so make large political donations, and they own a bunch of businesses so a pile of legislation in notoriously anti-worker US laws eventually benefit them.

This was my point: if you want to, you will find a donor that benefits from a law that someone they donated to has signed.

The Governor doesn’t write laws though.

What other exemptions exist? Is this the only one or something?

Reply on news.ycombinator.com