Chipotle could face class-action lawsuit over overtime pay
A lawsuit seeking class-action status was filed against Chipotle Mexican Grill alleging the fastfood chain failed to adequately compensate some employees for overtime work under a federal rule that went into effect late last year.
The lawsuit, filed this week in U.S. District Court in New Jersey, alleges the company failed to pay overtime to employees under the new overtime rule issued by the Labor Department last year — and that it’s not the only one.
Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, who represents the plaintiffs, said the issue may apply to other companies as well.
“For conscientious employers, a suit like this reminds them that the rule is in effect and that they should be paying overtime,” Sellers said. “I don’t fully understand the mind-set that has given rise to this broad belief that companies are not bound by this.”
At the core of the suit is the rule that made more employees eligible for overtime pay. It required employers to pay overtime to any worker who earned up to $47,476. Previously, the companies only had to pay overtime to workers making $23,660 or less.
But in late November, shortly before the rule went into effect Dec. 1, a Texas court put enforcement of it on hold so employers didn’t have to pay overtime to workers who had the higher salary threshold. The lawsuit says Chipotle should be required to continue to pay overtime despite the injunction of enforcement of the rule by the Texas court. It contends the Texas injunction did not apply to private employers and the overtime rule would stay in effect until the court issues its final ruling.
The lead plaintiff is a worker named Carmen Alvarez, who was training to become a general manager at a Chipotle restaurant, known as an “apprentice” within the chain. She was working about 10 overtime hours a week and was earning a total of about $43,082 a year but was denied overtime pay when the injunction was issued.
Chris Arnold, a spokesman for Chipotle, said the company doesn’t discuss pending legal actions. He added, however, that Chipotle’s employment practices are compliant with applicable laws and specified that “a lawsuit is nothing more than allegations, and the filing of a suit is in no way proof of any wrongdoing.”
Tim Trujillo, a human resources consultant who founded Focus HR in Tehachapi, Calif., said even if the lawsuit was to win in court, it might not be around for much longer if the Trump administration chooses to roll back the rule.
The Labor Department “will probably be reviewing and deciding whether they want to go forward with the same regulations” that came during the Obama administration, Trujillo said.