Off-the-Clock Overtime Lawsuit Against Chipotle Proceeds as a Collective Action

By Jeffrey Rhodes July 20, 2017

An overtime lawsuit by hourly night-shift employees of a Chipotle restaurant in Minnesota who allegedly worked uncompensated time closing the restaurant can proceed as a collective action, the U.S. District Court for the District of Minnesota ruled.

Chipotle operates more than 2,100 restaurants in 46 states and the District of Columbia, as well as internationally. In 2014, four hourly employees of a Chipotle Mexican Grill Inc. in Crystal, Minn., filed a lawsuit in the District of Minnesota against Chipotle on behalf of themselves and all others similarly situated under the Fair Labor Standards Act (FLSA) and the Minnesota Fair Labor Standards Act (MFLSA). They claimed that Chipotle has a companywide unwritten policy of requiring hourly paid employees to work off the clock and without pay, and they sought to recover allegedly unpaid overtime compensation and other wages.

The Crystal Chipotle was supervised by Minnesota team director Travis Moe, team leader Todd Patet and a restaurateur, who was Alex Cortez until November 2012, when the position was given to Jose Ramirez. Each Chipotle is also managed by a general manager, one or more "apprentice managers" who serve as assistant managers, one or more service managers, and one or more kitchen managers, and has 15 to 50 crew members.

A Crystal Chipotle apprentice manager from April 2012 to October 2013, Flinte Smith, filed a declaration in a related lawsuit against Chipotle in the U.S. District Court for the District of Colorado that his superiors, including Moe and Patet, knew that the general managers and apprentice managers in Moe's 50-store area required hourly employees to work off the clock to meet Chipotle's requirement that they keep labor costs down. Smith stated that he was directed to clock out hourly night-shift crew members before 12:30 a.m. and require them to keep working after they clocked out.

While Chipotle had written policies requiring that all employees be paid for all time worked, Chipotle's timekeeping system, called "Aloha," would automatically reset for the next day at 12:30 a.m. This had the effect of clocking out any employee who was clocked in when the reset occurred. While the Crystal Chipotle closed at 10:00 p.m. each night, closing shift employees were required to stay until the store was fully cleaned.

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On Sept. 9, 2014, the Minnesota district court conditionally certified as an FLSA collective all current and former hourly paid employees of the Crystal Chipotle who were employed on or after April 10, 2011 and who worked off the clock during closing shifts or were automatically punched off the clock by Aloha at 12:30 a.m. and continued to work. Notice of the lawsuit was sent to individuals identified as part of this conditional collective. During the "opt-in" period, 23 current and former hourly paid employees of the Crystal Chipotle joined in the collective action. These opt-in plaintiffs worked as crew members, hourly kitchen managers and hourly service managers.

Based on deposition and interrogatory answers of the plaintiffs, Chipotle filed a motion for decertification of the collective action. Chipotle claimed that the plaintiffs were not similarly situated to one another because they were not subject to one common FLSA-violating policy. Rather, some of the plaintiffs claimed that they were punched off the clock at 12:30 by the Aloha system, while other employees claimed they were told to work off the clock during closing shifts, and some even claimed other FLSA violations.

The court found, however, that the off-the-clock work in question was not so varied as to warrant decertification. Because the collective consisted of two types of workers—those reset by Aloha and those instructed to punch out early—this difference alone did not warrant decertification.

Chipotle submitted declarations from nonplaintiff employees who swore that they did not work any off-the-clock work. The court found that, while Chipotle could contest whether the FLSA was violated, collective certification remained proper.

Chipotle argued that differences between plaintiffs—some of whom were kitchen managers, some of whom were service managers and some of whom were crew members—supported decertification. The court found, however, that the kitchen and service managers worked closing shifts alongside crew members, largely performing the same tasks. Thus, there was no conflict of interest among the plaintiffs that supported decertification.

As a result, the court denied Chipotle's motion to decertify the collective action.

Harris v. Chipotle Mexican Grill Inc., D. Minn, No. 13-cv-1719 (SRN/SER) (June 12, 2017).

Professional Pointer: Employers must make sure that their managers resist pressures to allow or encourage off-the-clock work. Such pressures may be economic or practical in nature, but any variance from written timekeeping policies can lead to collective-action lawsuits and other serious legal consequences.

Jeffrey Rhodes is an attorney with Doumar Martin in Arlington, Va.

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