Chipotle has been through a lot these last few years. From food safety concerns to accusations that they lied to shareholders, it’s about time they caught a break. Fortunately for the restaurant, that time is now, as a judge recently ruled that “there’s insufficient evidence the burrito chain lied to shareholders” about food safety, resulting in the dismissal of a civil suit filed back in January 2016.
Chipotle has been through a lot these last few years. From food safety concerns to accusations that they lied to shareholders, it’s about time they caught a break. Fortunately for the restaurant, that time is now, as a judge recently ruled that “there’s insufficient evidence the burrito chain lied to shareholders” about food safety, resulting in the dismissal of a civil suit filed back in January 2016.
The suit, filed in the U.S. District Court of Southern New York, claimed the “burrito chain lied or exaggerated about how seriously it actually took food safety relative to how seriously it told investors and the public it took food safety.” The suit also alleged that Chipotle’s food-borne illness outbreaks back in 2015 were “partially caused by the company’s decision to, in late 2014, shift the process of prepping produce from central commissary kitchens to individual locations.” It also claimed that “Chipotle sought to shift the blame for these food-borne illnesses to other entities, including one of its own suppliers, even when such conclusions were not supported by the available scientific evidence.”
As if that wasn’t enough, the lawsuit also accused Chipotle CEO, Steve Ells, and other executives of “suspiciously selling off millions of dollars worth of stock a few months prior to the food safety outbreaks, suggesting that perhaps they knew something was coming that would cause the restaurant’s stock price to plummet.”
However, the judge ruled in favor of Chipotle and it’s executives, and rejected many of the claims against the restaurant. In the ruling, the judge claimed “there was not enough evidence to prove Chipotle had misled shareholders about the risk of potential outbreaks or the seriousness of its food safety problems.”
Despite this bout of good news, Chipotle has nonetheless been busy with courtroom battles lately. For example, last year the burrito chain “settled out of court with 100 customers who were sickened by E. coli or norovirus over the course of its food safety disaster that began in fall 2015.” In another lawsuit, the restaurant was ordered to pay “$600,000 in a gender discrimination lawsuit, and more recently, sued for $2 billion for allegedly using a customer’s photo without permission.”
To make matters worse, the chain’s profits have dropped drastically by an alarming 95% and is attempting to recover by improving their advertising, adding new menu items, and improving their mobile ordering options.
Join the conversation!