Chipotle to pay workers after store closes after trying to unionize

Chipotle restaurant in Teterboro, New Jersey.

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Chipotle Mexican Grill agreed to pay $240,000 to former employees of the Augusta, Maine establishment as compensation for the restaurant’s closure when workers attempted to unionize.

Chipotle restaurant employees petitioned to form a union under Chipotle United in late June, becoming the chain’s first store to do so. Prior to filing the application, workers had already walked out to protest working conditions and understaffing.

Less than a month later, Chipotle closed the restaurant, citing staffing issues and saying it respected the workers’ right to organize. However, in November the National Labor Relations Board found that the burrito chain violated federal labor law when it closed the restaurant and banned hiring organizers elsewhere in the state.

While Chipotle United considered the agreement announced on Monday a victory, it was unable to reopen the closed establishment.

Now, former employees of the closed Augusta facility will receive between $5,800 and $21,000 from Chipotle, depending on their average working hours, pay rate, and length of tenure. Chipotle will also propose that all of these workers be placed on the preferential employment list for other locations in Maine for a period of one year.

Approximately 40 stores in Maine, New Hampshire and Massachusetts will be posted notices that they will not close stores or be discriminated against based on union support. These places are under the direction of a Chipotle regional manager who has suspended union workers from work elsewhere, according to Chipotle United, which is not affiliated with any larger unions.

Chipotle did not immediately respond to CNBC’s request for comment.

To date, only one Chipotle operation has successfully unionized. A restaurant in Lansing, Michigan, voted in August to unionize under the International Brotherhood of Drivers.

The burrito chain has not seen an avalanche of union petitions since the organizers’ initial win in Michigan, unlike Starbucks, where in a little over a year trade unions were held in more than 290 places. But Starbucks Workers United accused the company of using similar anti-union tactics, including store closures. The coffee chain denies all allegations of union crackdown, although former CEO Howard Schultz is due to testify before a Senate panel on the company’s conduct on Wednesday.

— CNNBC Kate Rogers contributed to this report.

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