FSMNews

Almost 10,000 Chipotle employees have banded together in filing a wage-theft lawsuit against Chipotle.

Claims are that the fast food chain made their employees work extra hours without paying them properly leading to a country-wide case with plaintiffs from different states all over the United States.

In the Turner V. Chipotle lawsuit named after former Chipotle manager Leah Turned who then claimed to have been required to work extra hours back in 2014 without pay and asked those employees under her to do exactly the same.

According to Turner’s statement, the time recording system used by the chain was programmed to automatically punch them out by 12:30am despite staying later than the said time to finish tasks such as cleaning. She also stated that she was threatened to get fired under circumstances that she would fail to comply with the orders of her superiors back then.

The recent lawsuit bears the same complaints as the class action lawsuit states that Chipotle requires their hourly-paid employees on a routine basis to punch out even before finishing working and cannot leave until given the permission to do so.

The so-called cases range from being punched out early and not being able to go home without permission to not receiving proper salaries from extra hours worked.

According to Chipotle, the case has no merit against the company although this is the biggest allegation of wage theft yet as 9,961 current and former employees have filed and joined in with similar cases coming from almost every state the chain has a store in according to lawyer Kent Williams who is representing the said employees in the case.

Williams also stated that according to Chipotle, the lawsuit was started by a few reprobate managers who were not following the policies of the restaurant chain.

Free Drinks from Chipotle

Starting September, students from undergraduates, high school students and home-schooled students will be able to avail a free drink from Chipotle with any in-store purchase and by presenting a valid I.D.

In a press release statement from the company, the promo will last throughout the month of September and to help the students coming back to school even for just a bit. Students can avail and enjoy free fountain soft drinks or iced tea along with a valid purchase and a present school ID.

“It can be tough when the end of the summer collides with the reality of heading back to school,” Chipotle Communications Director Chris Arnold said in a statement adding that they’re going to give free drinks and refill the student’s cups in Chipotle branches all over the country in light of the new academic year. The purchases made along with redeeming the promo will still add up to the customer’s rewards through the loyalty program. Transactions amounting to $6 throughout the month will also reward a loyalty program member free food.

This is one of the fast-food chain’s efforts to win back their customers and the public in general after a series of mishaps throughout the year that caused a decline of almost 50% in their sales due to issues like mistreatment of employees, food safety issues, the E. coli outbreak and dispute over trademark claims.

Chipotle stocks unaffected by biggest employee issue yet

Despite the fact that the lawsuit was not the first among many cases filed against the fast-food chain, the news did not affect the shares of the restaurant as their stocks continue to rally for the past six consecutive sessions now up by 0.96% during the last trading session opening at 419.50 closing at 422.88 trading the highest hitting at 426.50 with 645,422 shares of the Chipotle (CMG) stocks exchanged.

The company currently holds a consensus price target of $438.42. CMG also currently holds a market cap of 12.32 billion.

Stocks traded shares yesterday 88% higher than expected with a volume of 1,100,510 shares out of 28,642,000. The number of shares traded reached 1,179,564 yesterday.

Last July 22 following the remains of their E. coli crisis the previous year, stocks climbed by 5.84% with trading the highest at 442.19 reaching a volume of 4.09 million shares.  Sales then fell by 23.6% in the second fiscal quarter which was recorded to be their third consecutive decline.

Also last August 9, CMG shares also dropped after a jury sided with a woman who filed a discrimination lawsuit and damages against Chipotle.

FSMNews

Three months prior to June this year, the store earnings of the chain dropped by 23.6%, a sheer 3.2 point higher than analysts’ expectations.

Conclusion

Although CMG’s shares have rallied which could be the result of their back-to-school promotional among students, the company is still facing a myriad of employee issues which might lead them to spend more on training and improving their employee relations which have hurt them in the past.

FSMNews

Some of their competitors have also invested on more ways of paying for their orders while Chipotle have invested multiple times huge amounts of money that decreases their cash levels for their marketing and other efforts in luring customers back in. If Chipotle would push more full-time promotions that reach the whole country like the back to school promotion, they might be able to bring back more and more customers in a short period of time. Any more promotions that are limited to a small number of states will probably not contribute to their sales struggling to go out of the negative zone.

FSM News provides daily newsletters to keep our readers updated on the biggest market affairs. Subscribe now to FSM News!