Chipotle Restaurant in Teterboro, Recent Jersey.
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Chipotle Mexican Grill agreed to pay $240,000 to former employees of the Augusta, Maine location as a part of a settlement for closing the restaurant when the staff tried to unionise.
Chipotle has denied wrongdoing, despite settling the lawsuit with the federal labor board and union.
“We settled this case not because we did anything improper, but since the time, energy and price of litigation would far outweigh a settlement,” said Laurie Schalow, director of communications at the corporate.
Chipotle restaurant employees petitioned to affiliate with Chipotle United in late June, becoming the chain’s first store to achieve this. Before the appliance was submitted, workers had already walked out in protest of working conditions and lack of staff.
Lower than a month later, Chipotle closed the restaurant, citing staffing issues and saying it respected workers’ right to organize. Nonetheless, in November the National Labor Relations Board found that the burrito chain violated federal labor law by closing the restaurant and stopping organizers from hiring at other locations within the state.
Although Chipotle United deemed the settlement announced on Monday a win, it has failed to reopen the closed location.
Now, former employees on the closed Augusta location will receive between $5,800 and $21,000 from Chipotle, depending on their average hours, pay rate and length of their tenure. Chipotle will also offer to place all of those employees on a preferential list for employment at other Maine locations for one 12 months.
About 40 stores in Maine, Recent Hampshire and Massachusetts will be announced not to close stores or discriminate due to union support. According to Chipotle United, which shouldn’t be affiliated with any major unions, the locations are under the direction of a Chipotle regional manager who has blackmailed pro-union workers out of jobs at other locations.
So far, just one Chipotle location has successfully formed a union. A restaurant in Lansing, Michigan, voted in August to unite under the International Brotherhood of Teamsters.
The burrito chain didn’t see an avalanche of union petitions after the organizers’ first victory in Michigan, unlike Starbucks, where greater than 290 locations united in only over a 12 months. But Starbucks Workers United accused the corporate of using similar anti-union tactics, including closing stores. The coffee shop chain denies all allegations of union-busting, although former CEO Howard Schultz is due to testify Wednesday before a Senate panel on the corporate’s conduct.
— CNBC Kate Rogers contributed to this report.