SEC joins probe of Chipotle hiring practices

Fri May 18, 2012 8:47pm EDT

A workman installs a sign on a new Chipotle Mexican restaurant under construction in Burbank, California April 15, 2011. REUTERS/Fred Prouser

A workman installs a sign on a new Chipotle Mexican restaurant under construction in Burbank, California April 15, 2011.

Credit: Reuters/Fred Prouser

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(Reuters) - Chipotle Mexican Grill Inc received a subpoena from the Securities and Exchange Commission as part of an expanding investigation into its alleged hiring of undocumented workers.

The Denver-based company fired about 500 employees more than a year ago following audits by the Department of Homeland Security's Immigration and Customs Enforcement (ICE) arm.

Chipotle said on Friday that it received the subpoena May 17 and that it intends to fully cooperate with the SEC's investigation.

Homeland Security and the criminal division of the U.S. Attorney's office for Washington, D.C., already are conducting probes into the company's compliance with immigration laws.

The SEC subpoena requested "information regarding our compliance with employee work authorization requirements, our related public statements and other disclosures, and related information," Chipotle said in a filing.

Michael Wildes, an immigration attorney and a former federal prosecutor who is not involved in the case, said it is "not common at all" for the SEC to get involved in immigration matters.

"It's often a ping-pong between the Justice Department and immigration authorities" with the Department of Labor at times stepping in, said Wildes.

Chipotle attorney Robert Luskin said in an email "it is not at all unusual for the SEC to join an investigation under these circumstances to determine whether the company has been forthcoming in its public statements."

Luskin, a top Washington lawyer, said he is "very confident that the SEC will find that the company fulfilled all of its obligations."

A spokeswoman for the SEC declined comment.

The popular chain is the highest profile U.S. company to come under the scrutiny of ICE since it shifted enforcement to employers rather than workers in 2009.

Unlike many rivals, Chipotle owns and operates its more than 1,000 U.S. restaurants and is ultimately responsible for hiring.

The company is known for its ability to control costs, particularly labor related expenses, while expanding rapidly.

Chipotle shares closed at $392.13 on Friday, almost 18 times higher than their $22 debut in 2006.

(Reporting By Lisa Baertlein in Los Angeles; editing by Carol Bishopric)

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Comments (2)
PatrioticMary wrote:
“The company is known for its ability to control costs, particularly labor related expenses, while expanding rapidly.”

So then, this company was able to control labor expenses by cheating the American people out of jobs and putting us in a position where WE had to support them with their multiple welfare IDs. This has gone on for way too long.

Their food sucks anyway. I ate there once and threw most of it away. I would have done just as well to eat hog slop.

May 19, 2012 4:23pm EDT  --  Report as abuse
Alitoo wrote:
From what I’ve read, Chipotle’s low labor costs (due to hiring illegal alien labor) have been a major reason for its profits and high per share price. No wonder the SEC is interested…

May 21, 2012 2:27pm EDT  --  Report as abuse
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