Workers Say Chipotle Owes Them Overtime Pay

Image courtesy of C_Dubyaa

Last year, a federal court issued an injunction that put the brakes on a Department of Labor rule that would expand overtime pay to millions of workers. While the government isn’t enforcing the rule because of the court order, a new lawsuit filed against Chipotle argues that that shouldn’t stop employers from abiding by the terms. To that end, employees of the fast casual restaurant in New Jersey are seeking to recoup overtime pay they would have earned under the rule. 

The Washington Post reports that the proposed class-action lawsuit, filed today in federal court in New Jersey, argues that while the injunction blocked the DoL from enforcing the rule, it didn’t prevent the rule from actually taking effect.

Because the rule was finalized and had been published in the Federal Register, the lawsuit claims, it actually took effect on Dec. 1, meaning that employers should still have to abide by the terms.

For those unfamiliar, prior to the rule, most employers were only required to provide overtime pay for workers earning up to $23,660/year ($455/week). The new rule would raise that threshold to $47,892/year ($921/week).

Additionally, the salary threshold for overtime eligibility would be automatically updated every three years. It has been more than a decade since the last significant change in this standard.

In Sept. 2016, nearly two dozen states sued the Labor Department and asked the judge to grant an injunction preventing the rule from going into effect.

Two months later, U.S. District Court Judge Amos Mazzant granted that injunction [PDF], finding that the plaintiff states had sufficiently established that the Labor Department may have overstepped its authority in setting the new salary levels and devising an automatic update mechanism for the salary threshold.

Despite this, the new lawsuit claims that because the federal court has yet to issue a final decision or repeal the regulation, the rule took effect as planned.

This, the complaint states, means that there was noting in the injunction preventing other parties — like Chipotle — from abiding by the rule.

“There’s been no finding that the rule is unlawful,” Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, the law firm representing the lead plaintiff, tells the Post. “We think the rule went into effect and that companies should be paying people overtime.”

In fact, the lawsuit notes that Chipotle employees in New Jersey began receiving overtime pay for hours worked over 40 hours a week in mid-November. However, a few weeks after the injunction was issued, the company stopped providing the overtime pay.

Consumerist has reached out to Chipotle for comment on the lawsuit. We’ll update this post if we hear back.

In the meantime, a rep for a worker advocacy group tells the Post that the case could have a “broad impact” on worker eligibility for overtime pay.