US restaurant chain Chipotle Mexican Grill may face a formal complaint from the National Labor Relations Board (NLRB) after the agency determined that union worker claims against the restaurant have merit.
Michigan union employees at Chipotle have accused the restaurant of denying them pay raises that other employees got after they became the first employees of the company to unionize.
Employee Union
In 2022, workers at a Chipotle restaurant in Lansing, Michigan voted to form the company’s first union with the International Brotherhood of Teamsters.
“Today’s victory is an amazing moment for our team that has worked so hard and spent many months organizing,” said Samantha Smith, 18, a crew member at Chipotle who has worked at the Lansing-area restaurant for more than two years.
Taking a Stand
Union members felt that had to take a stand to improve working conditions and get the pay they were owed.
“Chipotle pulled in revenue of $7.5 billion last year, and just as we’re seeing workers of all ages and backgrounds across the country take on these corporate giants, it’s so inspiring to see Chipotle workers stand up and demand more from a company that can clearly afford it,” said Scott Quenneville, president of Teamsters Local 243.
Chipotle’s Disappointment
In response to the union creation at the Lansing store, Chipotle released a statement emphasizing their benefits were industry-leading and disappointed in the union’s choice to involve the Teamsters.
“We’re disappointed that the employees at our Lansing, MI restaurant chose to have a third party speak on their behalf because we continue to believe that working directly together is best for our employees,” Laurie Schalow, Chipotle’s chief corporate affairs officer, said in a statement.
Union Busting
Earlier that year, workers at a Chipotle store in Augusta, Maine had petitioned for a vote to create a union.
However, on the same day an NLRB hearing was scheduled to determine the election process, Chipotle permanently closed the store, citing staffing issues. This action caused workers to accuse the company of union busting.
NLRB Complaint
Workers impacted by the Augusta store closing filed a complaint with the NLRB.
In 2023, Chipotle reached a settlement agreement where it paid $240,000 to workers.
Dispute Over Raises
Fast forward to now, and the Lansing workers have accused the company of not granting them the raises that other Chipotle employees have received because they are part of a union.
If true, this action by Chipotle potentially violates federal labor laws.
Company Statement
Chipotle gave a statement to CBS MoneyWatch, saying the company had been “bargaining in good faith on the first union agreement at our Saginaw Highway restaurant.”
However, Chipotle did not specifically address the allegations from the NLRB.
Complaint Threat
The NLRB has threatened to file a formal complaint against Chipotle unless the company can reach a settlement with the Lansing union workers.
Prosecutors for the agency determined the Chipotle had run afoul of the law, and was punishing pro-union employees to discourage activism.
Low Offer
As part of the ongoing dispute between the union workers and Chipotle, the company offered the workers a 5-cent raise last year, which they didn’t find compelling.
“Chipotle Lansing workers get $13.25 per hour. There are some fast casual chains in the area that pay as much as $16 or $17 per hour,” Teamsters spokesperson Matt McQuaid told Newsweek, highlighting that CEO Brian Niccol earned $17.2 million in 2022. “We’re asking for a living wage to start and raises every year thereafter that keep pace with inflation.”
Increased Scrutiny
This latest incident could lead to a renewed look at the company’s history of labor relations.
In 2022, the company was forced to pay $20 million to current and former workers in New York City for violating labor laws.
Bad Timing
This news comes at a bad time for the company, which just recently is grappling with its long-time CEO Brian Niccol leaving to take over coffee giant Starbucks in September.
Stocks for Chipotle fell 7.5% after news of Niccol’s departure broke.
