Chipotle Faces Unpaid Overtime Allegations in Potential Wage and Hour Class Action Lawsuit

Chipotle has been hit with a potential wage and hour class action lawsuit after numerous employees raised allegations of unpaid overtime.

Even though the potential wage and hour class action lawsuit is centered in New Jersey federal court, the claim alleges Chipotle had illegally relied on an earlier court ruling from a Texas federal judge that blocked the U.S. Department of Labor (DOL) from expanding overtime protections.

Chipotle allegedly did this to avoid paying their employees overtime benefits, resulting in the numerous claims of unpaid overtime against the company, the claims stated. The potential wage and hour class action lawsuit argues the DOL’s 2016 overtime eligibility extension applies to millions of employees who are earning less than an annual salary of $47,476.

However, a Texas federal court had temporarily restricted the DOL from implementing and enforcing the new policies. The potential wage and hour class action lawsuit alleges the Texas ruling, which primarily affects a certain group of states and businesses, does not lessen the responsibility that private companies have to ensure their employees are properly paid or compensated unpaid overtime.

The suit further stated that Chipotle and other companies have been illegally relying on the Texas ruling to avoid paying their employees overtime. Plaintiffs allege these cases of unpaid overtime are in direct violation of the Fair Labor Standards Act and New Jersey wage and hour laws.

Overview of Unpaid Overtime Allegations

Plaintiff Carmen Alvarez has filed the potential wage and hour class action after working and training to become a manager at a New Jersey-based Chipotle from December 2013 to March 2017.

According to the potential wage and hour lawsuit, Alvarez and other “apprentices” had regularly worked over 40 hours per week but often experienced unpaid overtime. Chipotle allegedly classifies apprentices as executive or administrative employees, which are exempt from overtime benefits.

However, Alvarez claims the apprentices regularly perform nonexempt occupational duties, including cash register duty and preparing food, and earned less than an annual $50,000 salary. Initially Chipotle had paid Alvarez and other apprentices overtime after the DOL’s new overtime expansion went into effect on Dec. 1, 2016, but then reversed it following the Texas ruling.

The Texas ruling had blocked the DOL from enforcing the overtime expansion, arguing the federal regulation failed to properly determine whether or not the salary amount was based on the duties the worker performs.

The DOL later appealed the decision in the Fifth Circuit, but the court stalled the appeal in April to see who the Trump Administration nominated for the Secretary of Labor position.

When Chipotle reversed their overtime progression, Alvarez and her co-workers adapted their potential wage and hour class action claim. Alvarez and her co-workers allege they regularly experienced unpaid overtime, and they were wrongfully classified as exempt.

This Chipotle Unpaid Overtime Class Action Lawsuit is Carmen Alvarez v. Chipotle Mexican Grill Inc. et al., Case No. 2:17-cv-04095, in the U.S. District Court for the District of New Jersey.

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