After a Bloomberg story suggested Governor Gavin Newsom was guilty of cronyism in carving out an exception for a friend to California's minimum-wage law, his team has come out swinging and he's issued a vehement denial.

The story arrived last week that Panera Bread was going to be exempt from the new fast-food-worker minimum-wage law taking effect in California on April 1, all because of an odd exception for establishments that baked their own bread on site. Bloomberg reported that the exception was very likely the result of a deal or favor between Newsom and his longtime friend and donor Greg Flynn, who happens to be a billionaire and prolific franchisee who owns dozens of Applebee's and Panera locations across the state.

Per Bloomberg, Applebee's wouldn't be subject to the law because it is a sit-down restaurant, but by adding the bread-baking exception, this would guard much of Flynn's empire, at least in California, from having to provide $20/hour minimum wages. While the marketplace for these jobs is such that $20 minimums are already pretty standard across the state, Bloomberg reporters suggested this would give Flynn's businesses more "flexibility" than most, going forward.

But then came some strong denials from Newsom and his camp, and from Flynn himself. And, it turns out, Panera isn't exempt from the law after all. The law is written to exclude bakeries and bagel shops who make their own dough and bake it on site — so chains like Subway and Panera, whose dough gets trucked in, wouldn't pass muster.

The law also states that the exception "does not apply if the bread is available for sale solely as part of another menu item."

Newsom's office called the allegations about Flynn and cronyism "absurd," speaking to the LA Times late last week. They also insisted, "The governor never met with Flynn about this bill."

Tia Orr, the executive director of the service workers' union, further told the LA Times, "There was never an intent to exclude one company, but instead to provide clarity on what constitutes a fast food establishment" in the writing of the law.

Flynn also gave a statement to the Associated Press saying, "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."

While Flynn's California properties are reportedly mostly Applebee's and Panera, his total empire of franchises includes over 444 Applebee’s restaurants, more than 280 Taco Bell locations, 133 Panera Bread cafes, 367 Arby’s restaurants, 937 Pizza Huts, and 194 Wendy’s restaurants, per his website.

The swift response from the Newsom camp and Flynn came after California Senate Republican Leader Brian Jones reacted, predictably, to the Bloomberg story by calling for an official investigation.

So, nothing to see here folks. Just a big misunderstanding?

Previously: Newsom Catches Flack For Exception to Minimum Wage Law That Exempts Panera Bread Chain

Top image: Customers enter a Panera Bread restaurant on November 01, 2023 in Novato, California. Missouri based Panera Bread announced plans to lay off 17 percent of its 1800 corporate staff as the company streamlines its operations ahead of an initial public offering. (Photo by Justin Sullivan/Getty Images)