Chipotle to pay $240K settlement to workers after company closed Augusta location amid union drive

Chipotle has agreed to pay $240,000 to former workers at its now-closed Augusta location as part of a settlement for shuttering that restaurant after employees announced they would attempt to form a union. 

The settlement comes after the National Labor Relations Board (NLRB) said late last year that Chipotle’s actions violated federal law. 

Workers at the Augusta Chipotle filed to form a union in June, which they called Chipotle United, the first attempted union by workers at the national fast-food chain. The union was spurred by concerns over persistent understaffing and a lack of training, which had prompted workers to walk off the job earlier in the month because they felt their employment conditions were unsafe. 

The store was temporarily closed after that walkout and the Augusta restaurant was then permanently shut down just before a hearing to determine the union process for workers, according to Chipotle United. Workers at the time called the move a clear example of union busting by the restaurant chain and filed a complaint, although Chipotle claimed the closing of the store had “nothing to do with union activity.” However, the NLRB disagreed and argued that Chipotle violated the law by closing the Augusta location in a complaint filed against the company in November. 

In addition, the NLRB found that Chipotle broke the law by blacklisting Augusta workers and refusing to consider hiring them at other locations in Maine. The NLRB explicitly stated in its complaint that Chipotle took that action and closed its Augusta restaurant because “employees supported and assisted the union.”

According to a press release from workers and their allies, under the terms of the settlement, Chipotle will pay a total of $240,000 to workers on the payroll of the Augusta restaurant when that store was closed in July. Depending on their average hours worked, pay rate, and length of employment before the location closed, employees will receive between $5,800 and $21,000. 

Furthermore, Chipotle will offer “preferential rehire” to employees at the Augusta restaurant at other Chipotle locations in Maine for one year, meaning those workers will receive first consideration for open positions. In addition, the company is required to post notices in about 40 restaurant locations in Maine, New Hampshire and Massachusetts that it will “not close stores or discriminate on the basis of union support.” That provision was created because those stores are under the leadership of Chipotle Regional Manager Jarolin Maldonado, who workers said was responsible for blacklisting pro-union employees from being hired at other locations. 

The former Chipotle workers hailed the settlement agreement. 

“This isn’t just a victory for Chipotle United. It’s a win for food service workers across the country,” said Brandi McNease, a former Augusta Chipotle employee and lead Chipotle United organizer. “It sends a message to corporations that shutting down a store and blackballing workers didn’t work for Chipotle and it won’t work for them either.” 

“Now that we’ve won this battle, we will keep fighting,” McNease added. “Every service employee deserves the right to safe working conditions and fair wages to support our families and this movement won’t stop until we get them. We are going to put an end to the old way of doing business.” 

In a statement, Laurie Schalow, chief corporate affairs officer for Chipotle, confirmed that the company has reached a settlement with the Augusta workers. Schalow said Chipotle agreed to the deal “not because we did anything wrong, but because the time, energy and cost to litigate would have far outweighed the settlement agreement.” Schalow added that the company respects the right of employees to organize. 

However, Jeffrey Neil Young, an attorney with Solidarity Law who represented Chipotle United workers throughout their organizing drive, said the company clearly engaged in union busting. Young said the settlement helps rectify some of that behavior. 

“While we did not force Chipotle to reopen the [Augusta] store, we won substantial gains for workers,” Young said. “Not all of the workers have secured work elsewhere and offering them preferential rehiring rights as well as substantial back pay helps remedy Chipotle’s blatant union busting. The labor laws need to be changed to impose greater penalties to more effectively deter companies like Chipotle and Starbucks from closing stores and blackballing workers in the face of union organizing efforts.” 

Chipotle, like other fast-food companies, is seeing union activity on multiple fronts around the country. For example, Chipotle workers in Kansas have also sought to organize — and have complained of union-busting attempts — and another restaurant in Michigan successfully formed a bargaining unit.