facebook pixal
Workforce

Chipotle could owe $450M in NYC fair workweek suit

A service workers union is applauding the city for filing a complaint against the fast-casual chain.
Chipotle Mexican Grill
Photo: Shutterstock

A large service workers’ union is commending New York City for filing a fair work week suit against Chipotle Mexican Grill this week that could force the fast casual to pay $450 million in back pay and civil penalties.

“We applaud the city for doing it,” Manny Pastreich, secretary-treasurer of union 32BJ SEIU, which represents 175,000 members in 11 states, told Restaurant Business. “Their CEO is one of the highest paid in the country. It’s the right thing to do, to comply with the law.”

The complaint was filed Wednesday by the city’s Department of Consumer and Worker Protection at the Office of Administrative Trials and Hearings (OATH).

Chipotle now has seven days to file a response to the complaint. OATH will issue a recommended decision, which will then be considered by the department’s commissioner.

The complaint, which was reviewed by RB, cited Chipotle on eight counts, the majority of which are violations of New York City’s Fair Workweek Law, which was passed in 2017. Two of the counts allege violations to the city’s paid sick leave law.

The city’s complaint cites 599,693 violations, each of which is subject to $500 in civil penalties against Chipotle, adding up to nearly $300 million in fines in addition to the $150 million the city says is owed to the fast-casual chain’s workers in back pay.

OATH estimates that each of the 6,500 Chipotle workers employed at all of the 80 to 90 restaurants operating between September 2017 and September 2019 experienced at least one violation, and that each impacted employee is owed about $23,000 in relief, according to the complaint.

In a statement to RB Wednesday, Chipotle said it would fight the suit.

“We make it a practice not to comment on litigation and will not do so in this case, except to say the proceeding filed today by DCWP is a dramatic overreach and Chipotle will vigorously defend itself,” Laurie Schalow, Chipotle’s chief corporate affairs officer, said. “Chipotle remains committed to its employees and their right to a fair, just and humane work environment that provides opportunities to all.”

Among New York City’s counts against Chipotle are:

  • Failure to provide written, good-faith estimates of work schedules
  • Failure to provide advance notice of work schedules
  • Failure to provide schedule change premiums
  • Failure to obtain written consent for additional hours
  • Failure to obtain written consent and provide premium pay for “clopenings” (quick-turnaround closing-opening schedules)
  • Failure to offer newly available shifts to existing workers
  • Failure to allow the use of sick time
  • Failure to maintain compliant sick time policies

 

OATH said it found “pervasive and repeating violations” of the Fair Workweek Law by Chipotle across its locations in New York City.

The complaint also alleges that Chipotle destroyed timestamped written schedules, in violation of the law.

“Chipotle engaged in this illegal document destruction even though the Department had put it on notice of the document retention requirement for written schedules three times,” the complaint said.

Further, the complaint said Chipotle required all workers in New York City to sign waivers of their right to premium pay for last-minute schedule changes.

“Although Chipotle began to make some efforts towards compliance in September 2019, upon information and belief, Chipotle still does not pay employees all premium payments owed for schedule changes made with little or no advance notice,” the complaint said.

In September 2019, Chipotle became the first restaurant chain to be targeted under New York City’s Fair Workweek law when the city filed suit against the fast casual for “widespread” violations of its predictable scheduling rule.

In January 2020, Chipotle was cited $1.37 million in restitution and penalties for more than 13,000 child labor violations and wage infractions in Massachusetts. As part of that case, the chain voluntarily paid $500,000 toward a fund to educate young workers about child labor laws.

Last week, the Newport Beach, Calif.-based chain announced its revenue increased 23.4% during its first quarter, to $1.7 billion.

Teodora Flores, a worker at a Chipotle unit in Manhattan, said in a statement that she wishes the chain would follow fair workweek laws.

“I’ve still had to fight to get access to the hours I need,” Flores, 52, said in a statement provided by the union. “I’ve had to ask my managers over and over for more hours, despite the law. I worry about having enough money to pay my bills, let alone save for retirement or send money to my family in Mexico … I need more hours of work now so that I can retire with dignity. If Chipotle followed the law, I wouldn’t have to worry so much.”

Luisa Mendez, who has worked at a New York City Chipotle for 2.5 years, told RB through a translator that she has asked for a stable work schedule but has been denied.

"They sometimes change it randomly," Mendez said. "I don't like this schedule because I work another job ... I want the company to be fair to the people who work for them. This is a hard job. Be fair to us."

 

This story was updated to include additional information from a Chipotle employee.

 

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.

Trending

More from our partners