By: Jennifer Weitz, Esq. and Ty Hyderally, Esq.

Restaurant chain Chipotle recently reached a $7.75 million settlement with New Jersey to address years of child labor law violations. The settlement is the result of a 2020 state audit that uncovered over 30,000 alleged violations from 2017 to 2020, at 85 locations across the state. The audit found that Chipotle engaged in “widespread and persistent” flouting of child-labor laws, including not following limits on how long minors are allowed to work and failing to provide sufficient meal breaks, among other concerns.

The agreement includes measures to monitor future compliance. Chipotle has committed to self-audits of hours worked by minor employees for the next three years, with a percentage allowance for violations that decreases by year. It will also designate a child labor compliance official and implement mandatory formal training of managers, supervisors, and staff regarding the State’s child labor protections. According to the Attorney General’s office, Chipotle’s history of labor law violations prompted the audit. Chipotle was cited for child-labor violations at four New Jersey locations from 2016 to 2018.

Chipotle’s labor law practices have been increasingly scrutinized and penalized. In 2020, Massachusetts fined the company $1.37 million for more than 13,000 child-labor violations, and this past August, the company reached a settlement with New York City to pay almost $20 million to approximately 13,000 workers for violating laws relating to predictable scheduling and paid sick leave. The New York City settlement followed an investigation from 2018-2021 that found Chipotle failed to give employees their work schedules 14 days in advance, failed to pay premium pay for schedule changes, and failed to allow employees to use accrued safe and sick leave, among other violations.

Chipotle’s labor issues appear to run deep. It is currently being sued by the Equal Opportunity Employment Commission over sexual harassment at a location in Washington state from October 2019 to June 2020. The EEOC complaint alleges that the chain “cultivated a toxic work environment when it allowed a male service manager and male crew member to sexually harass several young female employees.” The current suit follows an EEOC sexual harassment lawsuit that the company settled based on incidents at locations in San Jose, California. And in 2016, a former teenage employee was awarded $7.65 million after enduring repeated sexual harassment by her supervisor at a location in Houston. Chipotle also faced another sexual harassment lawsuit that year, from an employee in Los Angeles.

Chipotle has also had issues with employee labor organizers. After the chain closed a unionizing store in Maine, workers at a location in Lansing, Michigan voted to join the International Brotherhood of Teamsters at the end of August of this year. Currently, the Service Employees International Union is trying to engage Chipotle in New York City, through either voluntary recognition of the union or changing working conditions without a union election. The SEIU contends that Chipotle sees its workers as disposable, citing the chain’s turnover rate of 194%. The labor union also notes that Chipotle pays its CEO over $12,000 an hour.

Despite all of this, Chipotle’s corporate financial fortunes have been trending upwards. For the twelve months ending June 30, 2022, the corporation’s gross profit was $1.832 billion, a year-over-year increase of 24.05%. For 2021, its annual gross profit was $1.707 billion, an increase of 63.97% from 2020. Average restaurant sales have also steadily increased, from $2.2 million in 2020 to $2.6 million in 2021.

As part of its settlement with New Jersey, Chipotle stated that it is committed to ensuring its restaurants are in full compliance with applicable laws and regulations.

For more information on New Jersey’s labor laws, check out www.myworkrights.nj.gov.

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