Chipotle Mexican Grill may have violated federal labor law in its treatment of employees at its only unionized store, according to the National Labor Relations Board (NLRB).
The board said late Monday that its Detroit regional director found merit to allegations filed against Chipotle by the International Brotherhood of Teamsters. The union alleges that Chipotle unlawfully disciplined an employee in Lansing, Michigan, for engaging in union activity and told employees the fast-food chain couldn’t give them raises because they were unionized.
The regional director dismissed an allegation that Chipotle unlawfully withheld credit card tips from unionized workers. An allegation that Chipotle unlawfully used surveillance methods on its employees is still under investigation.
The NLRB said if Chipotle and the Teamsters don’t reach a settlement, its general counsel could file charges against the company that would be heard by the board’s administrative law judge.
Workers at the Lansing Chipotle voted to unionize two years ago, becoming the first of the company’s 3,500 locations to do so amid a broader unionization push across the country.
Chief corporate affairs officer Laurie Schalow said in a statement that Chipotle respects workers’ right to organize and has been bargaining in good faith with the Lansing store. Schalow blamed the union for long delays in scheduling bargaining sessions.
But the Teamsters accused Chipotle in a statement of dragging its feet and retaliating against workers to prevent the union from reaching a fair labor agreement.
“The NLRB made the right call by determining our claims have merit,” the union said.
Chipotle has violated labor law before. Last year, the chain agreed to pay $240,000 to former employees in Augusta, Maine. Chipotle closed the Augusta restaurant after workers there filed a petition for a union election, an action the NLRB ruled was illegal.
Chipotle’s labor record could come under increased scrutiny now that its chairman and CEO, Brian Niccol, has been hired by Starbucks. Niccol is set to start work at Starbucks on September 9.
Starbucks also opposed unionization when its workers first voted to unionize at a Buffalo, New York, store in 2022. But since then, more than 460 Starbucks stores have voted to unionize. Starbucks and its union, Workers United, agreed earlier this year to restart talks and try to reach a labor agreement.