The National Labor Relations Board (NLRB) has accused Chipotle Mexican Grill of unlawfully withholding pay raises from employees who have unionized. The NLRB’s general counsel is preparing to file a formal complaint unless Chipotle addresses the allegations.
The charges stem from claims made by the International Brotherhood of Teamsters. They allege that Chipotle informed employees in Lansing, Michigan, that they would not receive pay raises given to other employees because they had formed a union. As a result, the pay increase was withheld, according to CBS News.
Employees at the Lansing location voted for union representation in July 2022, making it the only Chipotle store in the U.S. to unionize. The first contract between the union and Chipotle is still under negotiation.
In a statement to CBS MoneyWatch, Chipotle said they have been “bargaining in good faith” and plan to resume negotiations this fall. However, the company did not directly address the NLRB’s allegations.
This issue comes on the heels of another case settled by Chipotle in April 2023. The company agreed to pay $240,000 to workers affected by the closure of a restaurant in Augusta, Maine, following unionization efforts.
This latest accusation could increase scrutiny on Chipotle’s labor practices, particularly as outgoing CEO Brian Niccol prepares to join Starbucks Corp. in September.
Niccol’s leadership at Chipotle saw the company’s stock surge by 650% over six years. His move to Starbucks has already boosted the coffee giant’s valuation by over $15 billion in a single day.
Despite recent challenges, some experts still see Chipotle as a strong investment opportunity. Stephanie Link, Chief Investment Strategist at Hightower Advisors, recently highlighted Chipotle’s potential, despite a 20% drop in its stock since June.
Chipotle Mexican Grill’s stock closed at $54.75 on Monday, up 1.94%. However, the stock is down 0.73% in pre-market trading. Year to date, Chipotle’s stock has surged by 21.94%.
