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Chipotle to pay NYC workers $20 Million to settle case alleging workplace violations

Fast food giant agrees to pay some 13,000 current and former employees to resolve city investigation of violations of local scheduling and sick leave laws.

August 10, 2022 Claudia Irizarry Aponte, THE CITY
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Chipotle Mexican Grill, the fast-casual Tex-Mex chain, has agreed to a $20 million settlement with the city in connection with city allegations it violated workplace protection laws around fair scheduling and paid sick leave.

The payout, the result of a four-year investigation and complaint filed by the city Department of Consumer and Worker Protection in 2018 through the Office of Administrative Trials and Hearings, is the largest settlement of its kind, according to DCWP Commissioner Vilda Vera Mayuga.

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Around 13,000 workers will receive restitution as part of the agreement, to be doled out in the coming weeks, according to DCWP officials. Under the deal, Chipotle also agreed to pay an additional $1 million in civil penalties to the city.

“This almost feels unreal. When you’re in the thick of it, like going to work each day and going through the motions, you think no one is paying attention,” Chipotle worker Yeral Martinez said in a statement. “But this settlement proves that we’re not invisible. Companies can’t treat their workers as disposable. We are worthy of respect, dignity, and fair schedules!”

Vera Mayuga and Mayor Eric Adams announced the settlement at a press conference in the City Hall rotunda on Tuesday afternoon.

“Our investigation found that Chipotle did not give employees advance notice of their work schedules, required employees to work extra time without their advance consent, did not properly compensate workers for schedule changes, did not offer available shifts to current employees before hiring new employees, and did not allow employees to use accrued paid safe and sick leave,” Vera Mayuda said on Tuesday.

“I am pleased to announce that we have reached a settlement that will put money back in the pockets of these workers — a settlement that is the largest fair workweek settlement in the country,” she added.

A Chipotle official also expressed satisfaction with the settlement.

“We are pleased to be able to resolve these issues and believe this settlement demonstrates Chipotle’s commitment to providing opportunities for all of our team members while also complying with the Fair Workweek law,” Chipotle Chief Restaurant Officer Scott Boatwright said in a statement on Tuesday.

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Vilda Vera Mayuga, commissioner of the Department of Consumer and Worker Protection, lauds the settlement with Chipotle at City Hall. Photo: Hiram Alejandro Durán/THE CITY

New laws wielded

The city’s probe into Chipotle’s workplace practices dates back to 2017. DCWP filed its initial OATH complaint into the company’s flouting of the city’s Fair Workweek law and Paid Safe and Sick Leave law in 2018.

The Fair Workweek law, in effect since 2017, mandates that management at fast food restaurants give notice of employee schedules at least two weeks in advance.

The Paid Safe and Sick Leave law mandates employers to provide accrued paid sick leave, which can be used for unexpected reasons and without advance notice, for the employee or a family member. The law also states employers must provide employees with a written notice describing the benefit and how to use it.

Last April, the city filed a follow-up action that alleged “systematic failures to comply” with the scheduling law, asserting that the company had violated the law nearly 600,000 times between 2017 and 2019 at nearly 90 locations across the five boroughs.

The Department of Consumer and Worker Protection calculated an estimated 6,500 employees were due nearly $150 million — “approximately $23,061.00 relief owed per affected employee.”

While Tuesday’s settlement covers double that number of employees, encompassing every Chipotle worker across the city, the $20 million settlement totals far below that amount.

Current and former workers employed by the company in New York City from November 26, 2017, through April 30, 2022, will receive $50 in restitution for each week worked. For example, a worker who was employed for a full year during that period will receive a $2,600 check.

In response to questions from THE CITY, Vera Mayuda reiterated the city’s satisfaction with the agreement, saying: “This is the fastest way to get relief to workers.”

Tuesday’s settlement does not cover any potential violations of the city’s Just Cause law, which went into effect in July 2021 and requires that workers be given valid reasons for firings and other dismissals. Vera Mayuga said the agency is “actively investigating” alleged violations of that law.

Union support

Chipotle workers across New York City have been organizing for several years, staging walk-outs from Washington Heights to Queens Center Mall. They allege unfair working conditions that would violate the Fair Workweek Law – such as last-minute schedule changes – as well as harassment and high turnover.

A Manhattan Chiptole advertised employee benefits, April 28, 2022.
Chipotle violated NYC laws protecting workers, the city alleged after a several-year investigation. Photo: Ben Fractenberg/THE CITY

Chipotle workers are not unionized, but have been working closely with 32BJ-SEIU. The union has accelerated its efforts at the fast-casual chain because the outposts are company-owned, rather than being largely owned by individual franchisees as at chains such as McDonald’s.

In April, THE CITY reported the story of Brenda Garcia, who claimed she was retaliated against for leading union efforts at the Roosevelt Ave. outpost where she worked. Garcia was reinstated two weeks after she was fired.

Last month, Chipotle closed a Maine outpost where workers had filed for a union election.

In 2019, the NLRB filed an unfair labor practice complaint against Chipotle, alleging the company intimidated and fired a worker for complaining about problems in their workplace and discussing union activities.

The NLRB general counsel at the time, Donald Trump appointee Peter Robb, claimed in that case that management “threatened to fire employees if they engaged in union activities — even implying they might face physical violence — and promised promotions to other workers who provided information about the organizing,” CNBC reported at the time. That case was settled in October 2020.

Mayor Eric Adams highlighted the role of the city laws in ensuring employees’ well-being.

“Workers must be able to plan their lives…. Many are parents, many are sole providers for the families,” Adams told reporters gathered at the City Hall rotunda. “That’s why we will continue to ensure that they receive the benefits they deserve.”

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