Dive Brief:

• Chipotle has agreed to pay $95,000 to a former employee who claimed he was locked in a walk-in freezer after reporting ongoing sexual harassment by his manager during 2015, according to Law360.
• The company has also come to an agreement with the U.S. Equal Employment Opportunity Commission to reform the way it handles sexual harassment complaints, which include requiring managers to send written and verbal complaints of harassment to a workplace hotline for investigation. A failure to inform the company could result in termination. Investigations into all complaints must also stick to a specific timeline, which includes a 30-day timeframe to complete investigations.
• Despite the pay-out, the company admitted no liability or wrongdoing alleged in the lawsuit, which was originally filed in 2017. 

Dive Insight:

Aside from the $95,000 fee, Chipotle will review and revise its internal complaint procedures. It will also add new anti-sexual harassment training and new policies that specifically hold supervisors accountable. These changes are a step in the right direction, especially considering the egregious details of this particular incident. 

In September 2017, a California Chipotle employee claimed he was subjected to unwanted sexual comments from his female general manager and groped numerous times. He also claims that same manager kept a sexual score board, asking employees if they had intercourse the night before their shift. He further alleges that after he complained to a supervisor, employees locked him in a freezer and moved his motorcycle to a different parking lot. He resigned shortly thereafter.

This isn't the only such allegation brought against Chipotle. In 2016, a 16-year-old Houston-based employee claimed she was repeatedly sexually harassed. A jury awarded her a $7.65 million judgment in a subsequent lawsuit. ​The New York Daily News reported in October that a Chipotle manager in Manhattan filed a complaint with the EEOC alleging her manager raped a fellow employee. She also claims she was sexually harassed during a training about sexual harassment and fired for reporting the incidents. 

Chipotle does have some training in place, as well as a code of conduct that specifically defines the illegality of workplace sexual harassment and prohibits retaliation. That code of conduct also includes instruction on employee recourse and management's responsibility in the case of such an incident.

Considering the ubiquity of these such cases, not just at Chipotle but across the industry (including and especially McDonald's as illustrated by another recent class action lawsuit seeking $5 million in damage), this $95,000 deal won't likely hinder Chipotle's reputation much or its revenue, especially since it earned about $4.8 billion in 2018. But it could add more fuel to the growing calls for change in the restaurant space. 

It's hard to argue such change isn't needed. According to the Harvard Business Review, sexual harassment is more common in the restaurant space than in any other industry, and as many as 90% of women and 70% of men in the industry have reported some form of sexual harassment. The difference for Chipotle is that its stores are entirely company owned, which arguably gives the company more control over its policies, as well as its supervisors, but also exposes it to more liability over how their employees behave.