UPDATE 1-Chipotle 'navigating' through immigrant worker woes

Thu Feb 10, 2011 6:48pm EST

* Chain disrupted by hundreds of firings in Minnesota

* Immigration problems hang over bright earnings report

By Mary Milliken

LOS ANGELES, Feb 10 (Reuters) - Fast-growing burrito chain Chipotle Mexican Grill Inc (CMG.N) said on Thursday it was too early to tell if it would change its hiring practices after a federal immigration crackdown forced it to fire hundreds of employees in Minnesota.

But as the company faces a widening probe into restaurants in Virginia and Washington D.C., executives said they are trying to head off the kind of disruption that occurred in Minnesota, where new hiring and training added 20 percent to 30 percent in restaurant crew hours.

"This has not been an easy process for anyone involved," co-Chief Executive Monty Moran told analysts on a fourth-quarter earnings call. "But we're navigating our way through it, and we're learning as much as we can so that we can avoid this sort of disruption in the future."

Analysts' scrutiny of the immigration probe was one of the few critical notes in an otherwise stellar day for Denver-based Chipotle, which reported strong quarterly results that sent shares up 7 percent. [nN10101260]

The company -- whose motto is "Food with Integrity" -- is one of the most high profile employers to come under the scrutiny of U.S. Immigration and Customs Enforcement (ICE) since the agency shifted its focus two years ago to probing employers' hiring rather than snaring workers in surprise workplace raids.

The investigation into Chipotle is also serving as a wake-up call to the restaurant industry, which relies on immigrant labor for around one-quarter of its work force.

Moran assured analysts that his company has a strict policy against hiring employees who are not authorized to work in the United States. He said it has professionals review documents to detect forgeries and train managers to examine them at the store level.

Moran said he wants to "use the Minnesota situation to get better" as the company plans to add 135 to 145 new stores to its 1,100 restaurants across the United States.

"This is a new situation for us -- to find out that there were a significant number of undocumented workers in Minnesota," said Moran. "And we're working with ICE and with a number of experts and professionals to make sure the disruption that occurred there is not something that takes place in the future for Chipotle."

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