Chipotle Faces Class Action Lawsuit

A lawsuit has been filed against the Chipotle restaurant chain claiming that the overtime rule put into effect by the Obama administration and subsequently halted by a Texas court injunction is valid and should be enforced.

The rule requires that employers pay time and a half to employees who work more than 40 hours but earn less than $47,476 in a year. Attorneys for Chipotle employees are proposing a class action lawsuit saying that the new rules took effect on Dec. 1 despite the injunction, because that court has neither repealed the regulation nor issued a final decision. They argue that since no court has found the rule unlawful, employers are obligated to pay their employees overtime per the new regulations.

Last December before the change in administrations, the Labor Department appealed the injunction. After the Trump inauguration, the new administration asked for an extension to examine the issues at hand before reaching a decision on whether to withdraw the appeal and replace the rule with something new.

The Obama administration introduced the new overtime rule in May 2016 saying it would go into effect December 1 of that year. Many employers like Walmart prepared to comply with the rule by changing schedules and raising manager salaries so that they would not be eligible for overtime pay. In New Jersey some Chipotle restaurants started paying overtime in mid-November to employees who worked over 40 hours. The lead plaintiff in the lawsuit regularly worked 50 hour weeks in a Chipotle restaurant in East Hanover, New Jersey, where she was an assistant manager. She says in addition to receiving overtime during that period, her schedule was also more predictable because the requests for her to come in early or stay late became less frequent. She was happy to have the extra money and be able to spend more time with family. Then after the injunction was issued in mid- December, Chipotle reverted to the old system of pay with a flat salary and no overtime. Eventually the plaintiff was fired in March after a dispute over her schedule.

Employees may be Entitled to Back Pay

Despite the injunction, some companies are choosing to keep in place the changes instituted in anticipation of the new overtime rule. Others have waited to see the final outcome of the case before making any changes. Some legal experts maintain that the injunction is enough to keep the rule from going into effect, while others say that since the rule had already been finalized and officially published before the injunction was filed, it is already in effect and the Labor Department is only blocked from enforcement of the rule. The outcome of the lawsuit will be significant if it is determined that employees are owed back wages.

Middletown Employment Lawyers at McOmber McOmber & Luber, P.C. Fight for Workers’ Rights to Fair Wages

If you have a wage and hour dispute with your employer, contact an experienced Middletown employment lawyer at McOmber McOmber & Luber, P.C. We have extensive experience advocating on behalf of workers’ rights to fair payment.

Call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online for a free consultation.