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NEW BRUNSWICK, NJ–On September 12, a U.S. Congresswoman formally recommended that the Department of Labor (DOL) investigate Denver-based Chipotle Mexican Grill Inc. for possible wage theft.
"Wage theft disproportionately affects low-wage, hourly workers," said U.S. Representative Rosa DeLauro, a Democrat from Connecticut, in a letter to the DOL.
The Labor Department, a federal agency based in Washington, DC, has not yet responded.
A Chipotle spokesperson called the Congresswoman’s request for an investigation "misdirected."
"We have maintained from the outset that this case is without merit and will vigorously defend our employment practices," said the spokesperson.
Chipotle has a locaton at 387 George Street in the Hub City, and one on Route 18 South in East Brunswick.
Nearly 10,000 former and current Chipotle employees have joined a class-action wage theft lawsuit, now two-years-old, against the Mexican restaurant chain according to court papers.
“Turner v. Chipotle,” a federal lawsuit first filed in Sept. 2014 by a former Colorado Chipotle manager, reportedly now includes one-fourth of the franchise’s total current workforce.
The complaint accuses the fast casual restaurant of forcing workers to work "off the clock" after their regular shifts, in what amounts to not being paid for any overtime.
Employees also said they had no choice but to stay after their regular duties to attend “mandatory after-shift meetings” and do closing cleanup procedures while not on the clock.
“To reduce this expense and maximize profit, Chipotle maintains a company-wide policy of not paying hourly-paid restaurant employees for all time worked, and encouraging its general managers to require that work be performed off the clock,” says court papers.
“Chipotle implements its policy with a system of reward and punishment. Payroll budgets are set that realistically can be met only if hourly restaurant employees work off the clock.”
Though each restaurant used an automated timekeeping technology system that clocked out workers at the end of their scheduled shifts, if they stayed longer, supervisors failed to record the extra time or were pushed not to document it, according to the complaint.
The suit seeks to recover overtime compensation by means of a jury trial for each employee who has joined the case.
Chipotle has been trying to regain the public's trust after an E. coli outbreak in 11 states where it operates restaurants, between November 2015 and January of this year.
Some 55 people became sick after eating the company’s food, but Chipotle still did about $4.5 billion in sales last year despite the negative publicity.
A criminal investigation in California over the E. coli by the U.S. Food and Drug Administration has not resulted in a determination as to the cause of the outbreaks.
But, on September 9, Chipotle reportedly settled with some 100 customers who became ill after eating at the restaurants.
"We are a company that does the right things for our customers and we simply believed settling these claims was the right thing to do," stated a Chipotle spokesperson, not revealing terms of the financial settlements.
While the company closed more than 20 of locations on a short-term basis during the crisis, it also closed all of its 1,900 units for a day so that they could undergo a complete sanitary cleaning.
The company also stopped preparing certain ingredients for its menu items at individual restaurants, instead shipping in raw components ready to use after being prepped at central kitchens.
According to DeLauro's letter to David Weil, the director of the Labor Department’s Wage and Hour Division:
- Wage and hour violations [also] pose a serious and growing problem for working Americans across industries and wage theft disproportionately affects low-wage, hourly workers, wrote DeLauro.
- A 2008 survey conducted by the National Employment Law Center of 4,387 low-wage workers in New York, Los Angeles, and Chicago found that 68 percent of them experienced some form of wage theft in the workweek immediately before the survey was conducted, wrote Delauro.
According to a summer report from Mashable, Chipotle sales dropped 16.6% to $998.4 million in its second quarter of this year, compared to the same period last year.