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Chipotle Says It Won’t Pay Up In OT Collective Action

Law360—Maya Rajamani

Chipotle Mexican Grill Inc. told a New York magistrate judge Friday it would not be making a monetary offer at an upcoming settlement conference with workers in an overtime collective action, saying it believed their case was “without merit” and that a financial settlement would be inappropriate.

In a letter to U.S. Magistrate Judge Sarah Netburn, Chipotle stood by its view that its apprentices were and still are exempt employees under the Fair Labor Standards Act and other state laws involved in the case.

“Chipotle does not believe that the mere initiation of litigation or the resulting defense costs associated therewith should obligate an employer — particularly one with such a meaningful investment in its employees — to settle for a monetary amount,” the restaurant chain said in its letter.

Initially launched in November 2012, the suit accuses the restaurant chain of illegally denying apprentices overtime and classifying them as managerial workers even though they spent most of their time on tasks such as filling orders and operating cash registers. Chipotle has argued that its employees meet the legal standards of being part of management and enjoy the salaries and benefits that come with such positions, according to court documents.

The court certified the collective action in June 2013, and discovery requests were served on the opt-ins in August 2014. Chipotle first asked the court for help in getting that discovery in September.

In Friday’s letter, Chipotle maintained its position that the plaintiffs’ collective action should be decertified and their class certification denied, citing the “voluminous record” it claimed showed that a majority of its apprentices perform tasks that would qualify them as exempt under FLSA and state laws.

But in spite of its opposition to a financial settlement, Chipotle said it would cooperate with the court by participating in a settlement conference currently set for Sept. 11, saying it would take advantage of the opportunity to press the plaintiffs to resolve the matter without a monetary offer.

Chipotle said the plaintiffs had informed Chipotle throughout the litigation that they would discuss a settlement with the company, despite their view that the chain misclassified its apprentices.

An attorney for the plaintiffs responded to Chipotle’s letter regarding the upcoming settlement conference with a single statement: “We hope that Chipotle will bring enough guacamole to get the deal done,” Justin M. Swartz of Outten & Golden LLP said in an email.

On Aug. 14, Chipotle butted heads with plaintiffs over whether 11 opt-in plaintiffs should be allowed into the suit, asking the court to rule that the plaintiffs were coming in too late after fact discovery to be included.

In a letter filed on Aug. 13, the plaintiffs sought to add more employees to the action, saying at least one of them had been intimidated by his manager, initially keeping him from reaching out to the plaintiffs’ attorneys.

After Chipotle filed its letter, Judge Netburn said she had recommended the dismissal of the nonresponsive opt-in plaintiffs on July 31 and that if the plaintiffs’ attorneys want to add more workers to the suit, they could take it up with U.S. District Judge Andrew L. Carter in an objection to that report, according to the case’s docket.

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The plaintiffs are represented by Gregg Shavitz and Keith Stern of the Shavitz Law Group PA, Brian Schaffer and Frank Mazzaferro of Fitapelli & Schaffer LLP and Justin Swartz, Ossai Miazad and Melissa L. Stewart of Outten & Golden LLP.

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The case is Scott v. Chipotle Mexican Grill Inc., case number 1:12-cv-08333, in the U.S. District Court for the Southern District of New York.