Chipotle settles NYC worker scheduling case for $20 mln

A sign is seen at a Chipotle Mexican Grill restaurant in San Francisco, California July 21, 2015. REUTERS/Robert Galbraith
  • 2017 law requires predictable schedules for fast food workers
  • City accused Chipotle of widespread violations
  • Largest worker protection settlement in NYC history

(Reuters) - Chipotle Mexican Grill Inc will pay about $20 million to settle claims by New York City that the company flouted a local law designed to make fast food workers' schedules more predictable, Mayor Eric Adams announced on Tuesday.

Chipotle and the New York City Department of Consumer and Worker Protection (DCWP) filed the settlement on Monday in an administrative case claiming the company failed to give workers schedules two weeks in advance or pay them a premium for unscheduled shifts, as required by a 2017 city law.

The settlement is the largest in the city's history involving worker protections, according to the Democratic mayor's office.

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Chipotle denied wrongdoing.

Scott Boatwright, the company's chief restaurant officer, in a statement said Chipotle has raised wages and implemented various policies to promote predictable scheduling.

New York City Corporation Counsel Sylvia Hinds-Radix in a statement said the settlement "shows that the city is committed to enforcing this local law, which improves the quality of life for workers who play a vital role in the city's economic recovery.”

New York City's law was one of the first in the U.S. to limit "on-call scheduling," in which retail, fast food and other service businesses call workers in or cancel shifts with little notice. Seattle, San Francisco and Oregon have adopted similar laws.

In complaints filed in 2018 and 2019, the DCWP claimed Chipotle committed widespread violations of the New York City law. That included not giving schedules two weeks in advance and requiring workers to "clopen," or close a store at night and open in the morning, which the law prohibits because it deprives workers of rest periods.

The settlement also covers claims that Chipotle violated a separate city law that entitles workers to paid sick leave.

Under the settlement, people who have worked at Chipotle's New York City locations will receive $50 for each week worked since November 2017. The company also will pay a $1 million penalty to the city. Adams' office said approximately 13,000 workers will be eligible for a payout.

Business groups have criticized on-call scheduling laws, saying they are unworkable and would lead to job cuts.

A New York state judge in 2020 dismissed a challenge by restaurant trade groups to the city's law, rejecting claims that it was too broad and was preempted by state law.

Read more:

New York City law gives fast-food workers scheduling rights

Biz groups lose bid to strike down NYC's 'fair workweek' law

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.