New York City said Tuesday it had reached a settlement worth more than $20 million with fast-food chain Chipotle Mexican Grill for violations of worker protection laws, the largest settlement of its kind in the city. history of the city.
The action, which affects some 13,000 workers, sends a message that “we will not sit idly by when workers’ rights are violated,” Mayor Eric Adams said in a statement.
The city said the agreement covered violations of scheduling and sick leave laws from the end of November 2017 through the end of April this year. Under the agreement, Chipotle hourly employees in New York City will receive $50 for each week they worked during that period.
The Fair Workweek Law enacted by the city in 2017 requires fast food employers to provide workers with their schedules at least two weeks in advance or pay a bonus for shifts.
Employers must also give workers at least 11 hours off between shifts on consecutive days or obtain written consent and pay them an additional $100. And employers should offer workers more shifts before hiring additional employees, to make it easier for them to earn a sustainable income.
Under a separate municipal law, large employers like Chipotle must provide up to 56 hours of paid sick leave per year.
The city accused Chipotle of violating all of these policies.
“We are pleased to be able to resolve these issues,” Scott Boatwright, the company’s director of restaurants, said in a statement. Mr. Boatwright added that the company had made a number of changes to ensure compliance with the law, such as new timekeeping technology, and that Chipotle hoped to “continue to promote the goals of predictable scheduling and access to working hours for those who love them.”
The city filed an initial lawsuit in the case, which involved a handful of Chipotle stores, in September 2019, then expanded the case last year to include locations across the city. At the time, the city said the company owed workers more than $150 million for the schedule violations alone. Worker advocates said civil penalties could far exceed that amount.
In addition to the $20 million in compensation, Chipotle will pay $1 million in civil penalties. A city spokeswoman said the deal was the fastest way to get relief for workers.
The city said in its statement that it closed more than 220 investigations and obtained nearly $3.4 million in fines and restitution under the scheduling law, and that it closed more than 2,300 investigations and obtained nearly $17 million in fines and restitution under sick leave. law. Neither figure includes the deal announced Tuesday.
The city spokeswoman said the city had filed more than 135 formal complaints under the two laws and that many employers settle before the city can bring a case.
Chipotle faces pressure on its labor practice on other fronts. Local 32BJ of the Service Employees International Union, which helped fuel the investigation at Chipotle by filing the initial complaints in the case, is seeking to unionize Chipotle workers in the city.
Chipotle employees at stores in Maine and Michigan have filed petitions for union elections. The Maine store has been closed, a move employees say was retaliation for the organizing effort. Chipotle has said the closure was the result of personnel problems and had “nothing to do with union activity.”