Thousands of Chipotle workers in New Jersey are being illegally denied overtime pay though they consistently work in excess of 40 hours per week, according to a lawsuit filed Wednesday in New Jersey Supreme Court. The lawsuit challenges the company's interpretation of a Texas judge's ruling, which blocked implementation of 2016 Obama Administration overtime rules announced last spring.
The lead plaintiff on the case is Fairfield resident Carmen Alvarez, a 55-year-old mother and grandmother, who has worked as a manager-in-training at multiple Chipotle restaurants since 2013, often in excess of 40 hours per week. Last November, the suit alleges, she and other apprentices were converted from salary to wage workers and began making overtime—apparently in response to new federal guidelines. But when the Texas ruling came down, the suit alleges, Alvarez and her coworkers lost their overtime.
The lawsuit cites a December email from Chipotle stating that the workers would revert to their previous salaries and would not earn overtime "because of" of the Texas decision. Since then, Chipotle has not kept track of workers' hours, which consistently creep past 40. Meanwhile, managerial apprentices continue to do many of the same tasks as their hourly counterparts, including filling orders and preparing sides like salsa, guacamole and chopped vegetables on the assembly line.
"I was crushed when Chipotle went back on its promise to pay me and other co-workers the overtime that we worked so hard for," Alvarez stated Wednesday.
The suit requests class action status for Alvarez and thousands of other current and former New Jersey Chipotle workers.
The U.S. Department of Labor last May announced plans to raise the ceiling for mandatory overtime for salaried workers—from $23,660 to $47,476 per year. Under the rule, qualifying salaried workers would be required to earn time-and-a-half for every hour worked in excess of 40 in a given week. But Texas Judge Amos L. Mazzant III blocked the rule days before it was supposed to go into effect last November, to the relief of business interests. The Obama administration had argued that doubling the wage limit for mandatory overtime stood to benefit 4 million salaried workers.
Attorneys for the workers are alleging that the judge's preliminary injunction did not "stay the effective date of the rule or otherwise prevent the rule from going into effect," according to court documents. The lawsuit also alleges that the Texas ruling, even if it were to stand today, would apply to state government employees, not workers employed by private companies.
"The federal overtime law allows law firms like ours to help ensure that workers are fairly paid for the roles they play in boosting corporate profits," said Justin Swartz, a lawyer representing the Chipotle employees.
Some labor lawyers who advocate for workers agree with Swartz, the Washington Post reports. Catherine Ruckelshaus, general counsel for the National Employment Law Project, told the paper that because the Labor Department finalized its rules early last year, Judge Mazzant's November injunction can't permanently block it. Ruckelshaus predicted that a positive ruling in this case could have a "broad impact" nationwide.
A spokesman for Chipotle denied that the company is flouting the law.
"As a matter of policy, we don't comment on details surrounding pending legal actions," said Chipotle spokesman Chris Arnold. "Though I'd note that all of our employment practices are compliant with applicable laws. I would also note that a lawsuit is nothing more than allegation, and is proof of absolutely nothing."
The Labor Department appealed the Texas ruling in December. Now, under President Trump, the Department has asked for more time to consider the case. Trump could also undo the Obama-era overtime rules independent of the courts.