Dive Brief:
- Chipotle and New York City settled a lawsuit Tuesday over violations of the city’s Fair Workweek law, initially filed by the city’s Department of Consumer and Worker Protection in 2021, the city announced at a press conference.
- Chipotle has agreed to pay $20 million to approximately 13,000 workers, which DCWP Commissioner Vilda Vera Mayuga said amounted to “$50 for each week or part of a week that [each employee] worked between November of 2017 and April of this year, 2022.”
- The suit was settled for much less than the $150 million the city initially asked for, and follows Chipotle’s legal battles in other states over issues including sexual harassment and excluding employees from overtime pay.
Dive Insight:
This high-profile settlement, and the nature of the infractions, could bruise Chipotle’s image and undermine recruitment and retention efforts amid the restaurant industry’s labor shortage.
The DCWP determined Chipotle was not notifying workers of their schedules in advance, destroyed records of scheduling it was required to maintain by city law, changed schedules without written consent or premium pay for workers, and did not provide adequate sick leave for workers in New York City.
The suit originated in a campaign led by the Service Employee’s International Union Local 32BJ, which brought the violations of the Fair Workweek law to the the attention of the DCWP in 2018. The city filed suit following a multi-year investigation.
“At its core, our fight focused on forcing Chipotle to respect the workers it relies on for its record profits,” Local 32BJ President Kyle Bragg said in a press release.
New York City Mayor Eric Adams said the settlement, which includes an addition $1 million in civil fines Chipotle must pay to New York City, is an example of business, labor and government collaborating to address longstanding issues. Chipotle has pledged to better its management of employee schedules going forward.
“We have implemented a number of compliance initiatives, including additional management resources and adding new and improved time keeping technology, to help our restaurants,” Scott Boatwright, Chipotle’s chief restaurant officer, said in a statement. “We hope this settlement will pave the way for greater cooperation between the restaurant industry and the City.”
Outside the courts, Chipotle has also faced sustained pressure from SEIU 32BJ in New York City, which is seeking union recognition without NLRB elections. In Maine, the company recently closed a store that had filed for a union election as an independent union.
