Chipotle may have outsmarted itself by blocking employee lawsuits


By Michael Hiltzik, SFGate

January 9, 2019


Fast-food companies accused of nickel-and-diming their workers through wage theft? That’s become almost a dog-bites-man story in today’s workplace environment. The same companies forcing the workers to bring their claims in arbitration rather than taking them to court? Ditto.


But one fast-food company appears to have outsmarted itself in fending off thousands of wage-theft claims. That would be Chipotle Mexican Grill, which owns more than 2,300 restaurants nationwide.


Chipotle has been fighting claims of wage theft lodged in federal court by current and former workers since July 2013, with the army of plaintiffs having grown to about 10,000 strong. Back in August, the company won a major victory by persuading a federal judge in Denver to eject more than 2,800 of those workers from the court proceedings because they had signed an agreement to bring their claims only through arbitration.


But was it really a victory? As a result of the ruling, Chipotle could face thousands of individual arbitration cases spread across the country, almost all the expenses of which it may have to shoulder itself — potentially tens of thousands of dollars per case. Already 150 arbitrations have been filed by workers.


“We didn’t ask for this,” says Kent Williams, a Minnesota attorney directly representing hundreds of plaintiffs. “Chipotle asked for it.”


Now Chipotle is squealing for mercy. In November, the company pleaded that the tide of arbitrations could cause it “irreparable harm” and asked Judge John Kane of Denver, who is presiding over the federal case, to suspend the filings — and also to disqualify Williams and other attorneys involved in the lawsuit from representing any of the workers in arbitration.


Kane denied both motions as merely the latest in a series of maneuvers by the company to throw sand in the gears of justice.


“Chipotle’s attempts to delay and obfuscate the claims of the arbitration plaintiffs,” he declared, “are unseemly.” He described the company’s strategy as “congesting the federal courts with countless appeals to prolong arbitration proceedings.” Those activities make a mockery of the supposed superiority of arbitration over lawsuits, its purported efficiency.


However, forced arbitration clauses are a scourge whenever they pit powerful parties, such as corporations, against the relatively powerless, such as employees or consumers: The big players are almost invariably favored by a venue that was designed for their benefit.


That’s why it was considered a victory for civil rights in 2014 when President Barack Obama signed an executive order banning companies with federal contracts worth more than $1 million from forcing workplace discrimination, sexual assault or sexual harassment complaints into arbitration. The Consumer Financial Protection Bureau also had implemented a rule barring banks and credit card companies from writing mandatory arbitration clauses into their consumer agreements, starting this year.


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