Dive Brief:

• New York City Comptroller Brad Lander filed a shareholder proposal on behalf of the city’s pension funds, urging Chipotle to adopt the International Labor Organization’s standards on freedom of association and collective bargaining, according to a press release published Friday.
• Lander’s office cited reports of Chipotle’s alleged violations of labor, including the closure of a Maine store and a series of fair workweek violations in New York that led last summer to a $20 million settlement with the city. 
• The pension funds, which owned over $80 million in Chipotle stock at the end of January, and Lander recently joined Trillium Asset Management and the Merseyside Pension Fund in a successful effort to persuade Starbucks shareholders to vote in favor of an independent labor rights review. 

Dive Insight:

The proposal calls on Chipotle’s board to prohibit the company from interfering with worker organization and to agree to timely collective bargaining if workers vote to unionize. Lander and pension fund leaders said they were acting in the interests of New York’s retired and unionized workers.

“Protecting workers’ fundamental rights to organize is not just good ethics, it’s good business. As long-term shareholders we expect responsible employers to respect the labor rights of their workers,” Lander said in a press release.

Chipotle did not immediately respond to request for comment regarding the shareholder proposal.

The company has faced pushback over its labor record recently, despite touting its record of internal promotion. Last week, the company settled an NLRB complaint that it illegally closed a store in retaliation for worker organizing efforts in Maine last year. The chain faced a U.S. Equal Employment Opportunity Commission complaint over religious harassment in September 2021 and settled thousands of child labor law violations in New Jersey for $7.75 million last September.

In March 2022, the EEOC sued the fast casual giant for allegedly permitting the sexual harassment of minors at a store in Washington state. In November, a worker in Connecticut sued the chain over alleged discrimination on the basis of ability. 

Some of Chipotle’s well-publicized worker issues, like the $20 million New York City fair workweek settlement, are part of a comprehensive campaign by the Service Employees’ International Union Local 32BJ aimed at raising working conditions and unionizing Chipotle in New York City. Local 32BJ’s parent union is also the parent union of Starbucks Workers United. The comptroller’s office said it has notified SEIU 32BJ of the proposal but has not engaged in formal outreach to the union.

Chipotle may be a more promising target for unions than other fast food chains because it does not franchise. The franchisor-franchisee relationship is generally seen as a bulwark against labor organizing by diffusing responsibility for working conditions, mostly precluding the possibility of a nationwide campaign of the sort seen at Starbucks in the last year-and-a-half.