- Chipotle is paying $240,000 to former employees who tried to form the chain’s first union.
- Federal regulators found the restaurant was in violation of labor laws when it closed the chain a month later.
- The settlement is equivalent to the worldwide revenue Chipotle made in 15 minutes last year.
Chipotle agreed to pay $240,000 to workers at the closed site after the workers tried to form a union.
Chipotle has agreed to fines and will be split between former employees in Augusta, Maine, a Chipotle spokesperson confirmed to Insider on Monday.This news was previously reported Kennebec Journal of Augusta.
Employees filed a petition to form a union last June. The following month, Chipotle said it would close the location, citing problems recruiting enough employees to run the location. CNBC reported. According to the Kennebec Journal, the National Labor Relations Board later found the closure violated labor laws.
Payouts will be split among employees at their original locations, with each receiving between $5,800 and $21,000, according to the journal, based on seniority, wage rate, and other factors.
According to the company, latest earnings report, Chipotle’s food and beverage revenue totaled $8.56 billion in 2022, or approximately $23,446,578 per day. The $240,000 fine equates to about 1% of his daily earnings for Chipotle. That calculation is based on Chipotle locations that are open every day and does not include locations that are closed on major holidays.
Under the settlement, Chipotle will also offer “preferred employment” for employees seeking work elsewhere in Maine.
Restaurant chains will also post notices in about 40 locations in Maine, Massachusetts and New Hampshire saying they won’t close stores or discriminate against their employees if they support the union. CNBC reported.
Chipotle chief executive Laurie Schalow said in a statement to Insider that the company agreed to the settlement “not because we did anything wrong, but because the lawsuits were being filed.” The time, effort and cost involved far exceeded the settlement agreement.”
“We respect the right of our employees to organize under the National Labor Relations Act and are committed to ensuring a fair and equitable work environment that provides opportunity for all,” Shalow said. says.
Chipotle United, which would have represented its employees had the union’s efforts gone forward, did not immediately respond to an insider’s request for comment on the settlement.
Employees at a Chipotle store in Lansing, Michigan, held an election last summer and voted to form a union. CNBC reported at the time.
The unionization effort at Chipotle began when Starbucks employees successfully organized unions in hundreds of the chain’s stores. Workers United represents employees in approximately 250 stores across the United States. The coffee chain has also faced union-busting allegations from the NLRB, and former CEO Howard Schultz believes unions have no role to play in the company.