- New York City Mayor Bill de Blasio's administration announced Tuesday that it is suing Chipotle for violating the city's Fair Workweek Law, which went into effect in November 2017. The law prohibits companies from changing an employee’s work schedule less than two weeks before the work date, CNBC reports.
- More than 30 Chipotle employees from five Brooklyn restaurants alleged in complaints to the Department of Consumer and Worker Protection that they were not given their schedules at least 14 days in advance. Complaints also detailed that the company did not receive consent for last-minute revisions or if an employee could close one day and open the next. The department also alleges that the company did not provide $100 in premium pay to work this "clopening" shift.
- The department is seeking at least $1 million in restitution, in addition to civil penalties and future compliance. Additionally, the city is launching an investigation of similar allegations in about a dozen Manhattan restaurants.
Given Chipotle's recent pushes to improve employee benefits, including a bonus program, these allegations could mean bad news for the restaurant's image and gives a stern warning to others. Restaurant operators have always had to navigate a number of labor laws, from overtime to minimum wage to joint-employer liability. Fair workweek laws are relatively new by comparison, but they are becoming more common. In addition to New York, they exist in San Francisco, Seattle and, soon, Philadelphia and Boston. With this case, de Blasio could be making an example of Chipotle, as the allegations illustrate why predictive scheduling laws were created in the first place.
Further, the Department of Consumer Worker Protection alleges that Chipotle has an illegal sick leave policy under the city's Earned Safe and Sick Time Act, which requires that workers get a minimum amount of time off from work for sick time for themselves or a family member. Employees who were interviewed said the sick time policy was inconsistent and confusing. The company said in a statement that it is working with the city to comply and will address prior noncompliance issues.
Compliance is important for obvious reasons. Such violations can be costly, although $1 million is rather small for Chipotle, which did $5.2 billion in business in the last year. Reputationally, it may be costlier for Chipotle. If the perception is that employees are being treated unfairly, that could turn off a growing number of consumers who care about such a thing, according to Harvard Business Review.
Further, if the perception is that employees are not able to take an appropriate amount of sick time, that could be even more damaging from a risk and safety perspective, which is certainly not what Chipotle needs after a long recovery from numerous food safety issues.
This isn't Chipotle's first go-round in court defending a labor issue. In 2016, nearly 10,000 employees sued Chipotle for wage theft. The company had faced similar lawsuits prior, but not quite as large as this class action case, which became part of a bigger decision that made its way all the way up to the Supreme Court last year.