Chipotle defeats US class action lawsuit on overtime pay

Chipotle restaurant workers fill orders for customers in Miami, Florida.
Getty Images

A federal judge on Wednesday granted a bid by Chipotle Mexican Grill to undo a class action lawsuit by manager trainees in six states who say they were unlawfully denied overtime pay.

U.S. District Judge Andrew Carter in Manhattan said the former Chipotle "apprentices" from New York, Illinois and four other states had varying duties depending on where they worked and could not show they were all eligible for overtime pay.

The plaintiffs in the 2012 lawsuit said that when they worked in the temporary, salaried positions training to manage new restaurants, they often performed basic tasks that could be assigned to hourly workers. That entitled them to overtime pay under state wage laws, the workers said.

Carter's decision blocks the seven workers who filed the lawsuit from representing a class of more than 500 people, which could end the case altogether.

The company's victory on Wednesday came as it faced a larger 2014 lawsuit filed in federal court in Colorado by 10,000 hourly workers who say they were required to work off the clock for no pay. A U.S. appeals court in Colorado on Monday rejected Chipotle's bid to undo the nationwide class of workers in that case.

Denver-based Chipotle, which operates more than 2,000 U.S. restaurants, did not immediately respond to a request for comment on Wednesday's ruling. Nor did lawyers for the plaintiffs.

Unlike most other fast food chains that operate on a franchise model, Chipotle owns its restaurants and is responsible for wages and other employment decisions.

Salaried workers like the Chipotle apprentices are automatically eligible for overtime pay under federal law if they earn less than $23,660. Employees who earn more must be paid overtime if they do not have management or administrative duties.

Last year, a federal judge blocked a controversial Obama administration rule that would have doubled the salary threshold to about $47,500 and extended overtime pay to more than 4 million workers.

The U.S. Department of Labor appealed the judge's ruling, but it is unclear whether the administration of President Donald Trump will pursue the case.

Trump's nominee for U.S. labor secretary, R. Alexander Acosta, told a U.S. Senate panel last week that he had not made a decision about how to proceed on the rule, but was concerned about its impact on businesses and workers.