Chipotle Faces Yet Another PR Fiasco
By Nicholas Van Zandt
On August 31, 2016 it was reported in BuzzFeed that nearly 10,000 current and former employees of Chipotle had filed a new lawsuit against the burrito chain restaurant claiming that they were being required to perform unpaid work after their shifts had ended. The suit alleges that Chipotle had violated federal labor laws by regularly failing to pay their staff for the hours that they worked. This comes after Chipotle had already settled a similar lawsuit with former employees in 2015.
As the article points out, the announcement of this suit is another significant blow to the company’s reputation after it was revealed in 2015 that a number of Chipotle stores had caused food-borne illness outbreaks leading to a nationwide temporary shutdown. This alone caused a 26.5% decline in sales in the first six months of 2016.
Plaintiffs have also alleged that Chipotle would promote employees to higher positions to avoid having to pay them overtime wages, however those employees claimed that there was no real difference in the work they were doing from their previous titles of crew member.
Recognizing the already tarnished reputation following the food illnesses, Chipotle for its part has been making efforts to improve its image among current and future employees. In early August 2016 the chain announced that it was partnering with Guild Education to pay their employees up to $5,815 a year in tuition reimbursement which as part of the partnership agreement will allow them to pay as little as $250 a year in tuition. They also offer health and dental benefits and paid time leave and vacation even for their hourly employees, benefits that are not available among their many competitors in the fast food industry.
References
Joanna Szabo, “Chipotle Workers File Wage and Hour Class Action Lawsuit,” TopClass Actions, August 19, 2015, Accessed on September 13, 2016, Available at: https://topclassactions.com/lawsuit-settlements/lawsuit-news/93469-chipotle-workers-file-wage-and-hour-class-action-lawsuit/
Venessa Wong, “Almost 10,000 Workers have Joined a Lawsuit Against Chipotle,” August 31, 2016, Accesssed on September 13, 2016, Available at: https://www.buzzfeed.com/venessawong/almost-10000-workers-joined-lawsuit-against-chipotle?utm_term=.mwxQNGRqE#.vajgONbMQ