Chipotle’s Woes Continue With Overtime Pay Lawsuit

The claim filed in federal court asserts that a federal rule expanding overtime pay is in effect despite a 2016 injunction prohibiting enforcement.

June 09, 2017

NEWARK, N.J. – Chipotle can’t seem to catch a break. With last year’s foodbourne illness outbreaks to this spring’s data breach, the fast-casual chain has been through the wringer. But its woes are not over with this week’s filing of a lawsuit in U.S. District Court, claiming that a federal rule allowed overtime pay to employees who worked more than 40 hours a week and earned less than $47,476 annually, the Washington Post reports.

The lawsuit essentially says the rule is in effect, no matter that a 2016 injunction forbids the U.S. Department of Labor from enforcement. The proposed class-action suit for New Jersey Chipotle workers says that Chipotle should be paying time and a half to eligible employees for overtime work since the rule took effect as originally planned on December 1.

“There’s been no finding that the rule is unlawful,” said Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, which represents the lead plaintiff. “We think the rule went into effect and that companies should be paying people overtime.”

The implications of the case exceed Chipotle, with millions of workers eligible for overtime pay. Basically, the injunction put the rule in limbo—on hold from enforcement but not eliminated outright. The lawsuit counters that the injunction didn’t technically prohibit the rule from going into effect, since it had been finalized and published already.

In February, NACS submitted testimony about how the overtime pay rule would have “substantial adverse effects on the retail fuel industry” to a House Education and Workforce Committee’s Subcommittee on Workforce Protections hearing. The NACS government relations team continues to monitor this issue.

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