A lawsuit has been filed against Chipotle on Wednesday, claiming that a federal ruling expanding overtime pay to its workers is in effect even after an injunction last year that banned the Labor Department from enforcing this regulation. The proposed class action lawsuit was filed in U.S. District Court in New Jersey and alleges that the popular Mexican eatery is responsible for paying time and a half to employees who work more than the standard 40 years per week and are earning less than $47,476 per year. Depending on the outcome of the case, the lawsuit could potentially mean significant scheduling changes and back pay for many of Chipotle’s employees. It could also have implications for others who would become eligible for overtime pay under the rule.
Chipotle’s attorneys argue that the rule took effect as scheduled on December 1st because the court ordering the injunction hadn’t issued a final decision in the matter or chosen to repeal the regulation, and the eatery was anticipating being held responsible for changes. Employers raised the salaries of many workers with full schedules, adjusted employees’ schedules if they were working too many hours and made other changes to comply with the regulation.
Some locations decided to stick with their new policies on a “just in case” basis, but others are choosing to wait until they hear the final outcome of the case before accepting they are responsible for changes. Some Chipotle employees in New Jersey started receiving overtime pay in mid-November for hours worked over 40 hours a week. The schedules of others have also gotten more predictable, because employees are no longer being pushed to work over 40 hours. But, others have noticed only temporary changes and their supervisors have stopped abiding by the rules pending a court’s decision.
Carmen Alvarez, the lead plaintiff in the suit, is one such employee that has noticed positive changes, only to have them taken away. As an assistant manager, Alvarez regularly worked about 50 hours a week, and she began to receiving additional pay temporarily, only to have this revoked. By mid-December, a few weeks after the injunction, Alvarez was switched back to a flat salary and told she would no longer receive overtime pay. “I was disappointed when they changed it back because I thought I would spend more time with my family or at least get rewarded for the time that we work,” she said.
“There’s been no finding that the rule is unlawful,” said Joseph Sellers, a partner at the law firm representing Alvarez. “We think the rule went into effect and that companies should be paying people overtime.” The order was filed in order to give the court more time to reach a final decision, since The Labor Department appealed the injunction last December while it was still under the Obama administration and now the nation has a new president. In February, the Trump administration asked for more time to “consider the issues” and decide how to move forward with the case. It now has until June 30 to file a brief with the court.
The case has been challenged by 21 states and a slew of business groups, including the Chamber of Commerce. And, attorneys representing Chipotle workers have also handled other high-profile cases against employers, so they plan to come prepared for battle.