Chipotle Reaches Settlement with Former Employees After Closing Unionized Store

Chipotle will pay $240,000 to former employees in a settlement after closing a restaurant where workers wanted to unionize.

Chipotle Mexican Grill has agreed to pay $240,000 to former employees as part of a settlement stemming from a complaint that the company violated federal law by closing a restaurant where workers wanted to unionize. The Augusta, Maine, location was the first in the chain to file a union petition, and Chipotle announced it was permanently closing it last year after workers filed a National Labor Relations Board petition for a union election. The NLRB later said the closure was illegal.

The settlement, released by union officials on Monday, states that two dozen employees will receive payments from Chipotle and will be placed on a preferential hiring list for other Maine locations. The company must also post a notice in dozens of stores in New England that it won’t close stores or discriminate against employees due to union support, the settlement states.

According to union officials, payments vary based on the workers’ average number of hours worked, pay rate, and longevity prior to store closing. The settlement comes as Chipotle faces 10 other open unfair labor practice cases. Parties agreed in January to a settlement on four of these cases.

“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,” said Brandi McNease, a former employee of the Augusta store and the lead organizer of the union drive, in a statement provided by the Maine AFL-CIO.

Chipotle said in a statement that it settled the lawsuit because fighting it would have been burdensome and expensive. The company respects “our employees’ rights to organize under the National Labor Relations Act” and is “committed to ensuring a fair and just work environment that provides opportunities to all,” said Laurie Schalow, chief corporate affairs officer for the company.

The payments to former employees and the company’s agreement not to close stores or discriminate against employees due to union support represent a significant win for labor advocates, who have been pushing for greater protections for workers in the fast-food industry.