The Washington Post

Chipotle closes store that sought to unionize

- BY AARON GREGG

Chipotle has permanentl­y closed a Maine location where workers were attempting to unionize, drawing criticism from organizers who condemned it as a union-busting tactic.

The store, located in a strip mall just off the highway in Augusta, recently became the first Chipotle location to file union paperwork with the National Labor Relations Board. But hours before the matter was scheduled to be taken up at a 10 a.m. hearing Tuesday, the company notified workers of the closure, according to emails shared with The Washington Post by Jeff Young, an attorney representi­ng the workers.

Young accused the company of illegally retaliatin­g against workers who sought to organize. The union has filed an unfair labor practice charge over the issue.

“I call it union-busting 101,” Young said in an email. “This clearly was a signal to [workers] that if you organize you could lose your job.”

The National Labor Relations Act prohibits employers from interferin­g with, restrainin­g, or coercing employees exercising their right to organize. That could include dischargin­g or laying off an employee or threatenin­g to close the workplace, according to the NLRB.

Chipotle’s chief corporate affairs officer, Laurie Schalow, said the closure was because of “staffing challenges.” The company went to “extraordin­ary lengths” to fill positions at the restaurant, which has been closed since June 17, and dedicated two recruiting experts to the location, she said in an emailed statement.

“Despite these efforts, we have been unable to adequately staff this remote restaurant with crew and continue to be plagued with excessive call-outs and lack of availabili­ty from existing staff,” Schalow said, adding that the company also has been unable to hire store managers.

“Because of these ongoing staffing challenges, there is no probabilit­y of reopening in the foreseeabl­e future, so we’ve made the decision to permanentl­y close the restaurant,” she said. Employees will receive four weeks of severance pay, according to an email to staff obtained by The Washington Post.

The labor movement has made inroads this year at a number of traditiona­lly nonunion companies, including Apple, Amazon and Starbucks, drawing strength from a shortage that has given workers additional bargaining power.

Employers, meanwhile, are navigating an uncertain economy in which inflation is upending longestabl­ished ways of doing business. Chipotle raised its prices roughly 10 percent between 2020 and 2022, executives noted during a February earnings call, as it was forced to contend with higher prices for things like chicken and avocados.

Labor has also become more expensive for Chipotle, which logged $626.9 million in costs during the three-month period ending March 31, a 26.3 percent increase for the quarter.

Despite the labor shortage, Chipotle has closed relatively few of its stores. The company closed just one store in the nine-month period ending March 31, while opening 170 new restaurant­s, according to its quarterly financial results. It closed 10 stores in the first half of last year.

A company spokespers­on said Wednesday that 13 stores in total have been closed in the past 18 months due to staffing challenges, performanc­e, lease agreements and other business reasons, while an additional 12 were relocated. Its website lists nearly 3,000 locations nationwide.

The Augusta Chipotle sits in a relatively remote area along Maine’s Kennebec River, about 40 miles inland. Its population was just shy of 19,000 as of the 2020 Census. The unemployme­nt rate in Kennebec County, which includes Augusta, is a low 2.9 percent, according to data published by the state.

Store closures have played into labor disputes at some other companies. Starbucks recently drew criticism for closing a coffee shop near Cornell University in Ithaca, N.Y., amid a union drive there, according to NPR.

The AFL-CIO, which has been advising the independen­t Chipotle union on an informal basis, issued a news release proclaimin­g “shame on Chipotle” for closing the Augusta store, noting that a rally had been planned for Tuesday afternoon.

In the release, Chipotle worker Brandi Mcnease accused the company of trying to “bully, harass and intimidate” workers to stifle their voices. She said the company is scared of workers’ power, citing successful organizati­on efforts at dozens of Starbucks stores.

“We are fighting this decision and we are building a movement to transform the fast food industry and ensure the workers who create all the wealth for these corporatio­ns are respected and no longer have to struggle to support their families,” Mcnease said.

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