New York City on Wednesday sued the fast-food giant Chipotle Mexican Grill over what it says are hundreds of thousands of violations of a fair scheduling law at several dozen stores.
Workers are owed over $150 million in relief for the violations, according to the complaint, and financial penalties could far exceed that amount, making it the largest action the city has brought under the law.
The suit cites violations of the so-called Fair Workweek Law that include changing employees’ schedules without sufficient notice or extra pay; requiring employees to work consecutive shifts without sufficient time off or extra pay; and failure to offer workers additional shifts before hiring new employees to fill them.
The allegations cover the period from November 2017, when the law took effect, to September 2019, when the city filed an initial suit involving a handful of Chipotle stores. The new complaint, filed by the Department of Consumer and Worker Protection at the Office of Administrative Trials and Hearings, said that Chipotle had made some attempt to comply with the law since 2019, but that violations were continuing.
“Since we first filed our case against Chipotle, we have unfortunately learned that those initial charges were just the tip of the iceberg,” the department’s commissioner, Lorelei Salas, said in a statement.
Mayor Bill de Blasio said in a statement: “Chipotle’s flagrant disregard for our laws and for their employees is unacceptable. Workers deserve reliable schedules and we will do everything in our power to hold them accountable.”
Laurie Schalow, Chipotle’s chief corporate affairs officer, called the city’s lawsuit a “dramatic overreach” and said the company would “vigorously defend itself.”
“Chipotle remains committed to its employees and their right to a fair, just and humane work environment that provides opportunities to all,” she said in a statement.
Rather than adopting the franchise model that many competitors rely on, the company owns and operates its roughly 80 to 90 stores throughout the city.
The workweek law passed after lobbying by prominent unions, including the powerful Service Employees International Union local, 32BJ, which has been trying to unionize Chipotle employees. A growing body of research shows that erratic schedules can exact a large physical and emotional toll on workers and their children.
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Under the law, fast-food employers must provide workers with their schedules at least 14 days in advance — or, if not, obtain written consent for them and pay them a premium for the shifts.
Employers must also provide workers with at least 11 hours between shifts on consecutive days or obtain written consent and pay them $100. The hope is to discourage the practice of forcing workers to work late into the evening and then help open a store in the morning, known as “clopening.”
The provision requiring employers to offer workers additional shifts before hiring new workers was intended to make it easier for workers to earn enough income to sustain themselves.
Employers in fast-food and retail operations often hire more workers at fewer hours to add scheduling flexibility, said Saravanan Kesavan, an expert in retail operations at the University of North Carolina. Dr. Kesavan has conducted research showing that financial performance can actually improve when employers provide more stable and predictable schedules.
The complaint also accuses the company of violating the city’s paid sick leave law, which was enacted in 2014 and mandated up to 40 hours of paid leave per year. (The ceiling grew to 56 hours beginning this January for larger employers.) The city contends that Chipotle illegally denied requests for time off, required workers to find their own replacements or did not pay workers for time they took.
According to the complaint, all of the estimated 6,500 Chipotle employees in New York City from November 2017 to September 2019 were affected by violations involving scheduling and sick leave, and on average they experienced more than three scheduling violations a week.
Teodora Flores, who works at a Chipotle at the Empire State Building, said through an interpreter that she typically received her schedule at least two weeks in advance and had not been asked to work clopenings, but that she had struggled to receive enough hours to support herself.
Ms. Flores, 52, said that she often worked 40 hours a week when she started at the store in February 2018, but that her hours gradually fell after a new manager took over several months later. She said she worked about 21 hours a week for much of last year, and that the store was hiring new workers for a few months during this time.
Ms. Flores said her hours had gradually increased since then, but only after she complained repeatedly to store managers and area managers. She said that a manager also asked her to find a replacement when she recently tried to take a sick day, but that she refused.
Chipotle has faced other challenges in recent years. Hundreds of people became sick after eating at Chipotle restaurants in 2015 and 2016, some from E. coli bacteria, leading to a sharp decline in the company’s stock price and threatening the image it had cultivated as a purveyor of “food with integrity.”
Last year, Chipotle was fined nearly $1.4 million over accusations that it regularly violated Massachusetts child labor laws from 2015 to 2019. The company settled the case without admitting violations.
But the company has posted solid sales growth during the pandemic, with revenue of $6 billion last year, and its stock price has soared.
According to the New York City complaint, Chipotle frequently violated the law by either destroying or failing to maintain or produce records attesting to its scheduling policies.
“Chipotle failed to produce certain categories of scheduling information the department requested, in part because it had destroyed paper schedule records,” the complaint states. “However, the evidence Chipotle did produce, as well as evidence that employees provided, shows that Chipotle did not begin to implement key elements of the Fair Workweek Law in any of its New York City locations until approximately September 2019.”