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The Fair Workweek Law: Chipotle Agrees to Pay up to $20 Million in Settlement with NYC

Chipotle Mexican Grill, Inc. (“Chipotle”) and the New York City Department of Consumer and Worker Protection (“DCWP”) recently entered into an agreement (consent order) to settle claims for Chipotle’s alleged violations of the NYC Fair Workweek Law (“FWW Law”) and the NYC Earned Safe and Sick Time Act (“ESSTA”). Pursuant to the agreement, hourly “fast food employees” (as defined under the FWW Law) who worked for Chipotle in New York City will receive $50 for each week worked from November 26, 2017 to April 30, 2022, where the total aggregate amount paid by Chipotle is capped at $20 million. For example, an employee who worked for Chipotle for 100 weeks in NYC during the relevant time period would receive $5,000. Chipotle must also pay $1 million to the City in civil penalties.

The DCWP commenced its investigation into Chipotle’s compliance with the FWW Law and ESSTA in 2018 following complaints brought by employees at Chipotle locations in Brooklyn, New York. Following its investigation, DCWP filed a case against Chipotle for violating the FWW Law at the Brooklyn locations, but subsequently expanded the case to include Chipotle locations throughout New York City after discovering information about additional violations citywide. Among other violations, DCWP’s investigation[1] found that Chipotle violated the FWW Law by:

  • Failing to give employees their written work schedules 14 days in advance.
  • Requiring employees to work additional time without the employees’ advance written consent.
  • Failing to pay premium pay for employee schedule changes (without the requisite advance notice).
  • Requiring employees to work “clopening” shifts (i.e., when workers work the closing shift one day and the opening shift the following day with less than 11 hours in between the shifts) without paying the requisite $100 premium.
  • Failing to offer newly available shifts to current employees before hiring new employees.

In short, the FWW Law, which was enacted in 2017, requires NYC fast food employers to (among other things) give employees advance notice of their work schedules and pay employees premium pay for changes to their work schedules without the requisite advance notice.

Notably, the FWW Law was expanded in July 2021 to essentially eliminate “at-will” employment for fast food employees. Specifically, fast food employers now cannot terminate or reduce the hours of a fast food employee by more than 15% without a bona fide economic reason or just cause. Absent an employee’s “egregious misconduct” or “egregious failure to perform job duties” (which are limited exceptions under the FWW Law), fast food employers cannot discharge fast food employees unless they give employees multiple opportunities to correct performance issues or instances of misconduct, in accordance with their written progressive discipline policies.

As demonstrated in the case of Chipotle, the penalties for non-compliance with the FWW Law can be significant. NYC fast food employers should work with employment counsel to ensure compliance with the numerous complex and onerous requirements of the FWW Law, including the advance scheduling and schedule change requirements, the implementation of and adherence to a progressive discipline policy for fast food employees, and the obligations to offer newly available shifts to current or recently laid off employees before hiring new employees.

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[1] The DCWP also found that Chipotle violated the ESSTA by failing to allow employees to use accrued safe and sick leave.

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Employment Notes, a newsletter produced by Tannenbaum Helpern Syracuse & Hirschtritt LLP’s Employment Law practice, provides insights on recent employment caselaw, legislation and other legal developments impacting employer policies, human resource strategies and related best practices. To subscribe to the newsletter, email marketing@thsh.com.

09.02.2022  |  PUBLICATION: Employment Notes  |  TOPICS: Employment

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