February 26, 2021
Chipotle Mexican Grill Inc. has agreed to pay $15 million to resolve class claims that the restaurant chain improperly failed to pay overtime to management trainees based on a controversial U.S. Department of Labor overtime expansion rule, according to a motion filed Friday in New Jersey federal court.
In what would end a legal battle that has stretched across the country, plaintiffs and former Chipotle employees Carmen Alvarez and Asher Guni urged the court to sign off on the agreement, citing the risks of further litigating “novel” legal issues surrounding the DOL rule and a Texas federal court order barring the agency from implementing it.
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The overtime rule, which was slated to take effect in December 2016, would have doubled the salary threshold for executive, administrative and professional workers to be exempt from overtime pay requirements. The DOL’s revision raised the salary threshold from $23,660 to $47,476 a year and created an index for future increases.
Several months after U.S. District Judge Amos Mazzant blocked the DOL from enforcing the rule, Alvarez in June 2017 initiated the action alleging Chipotle had misclassified her and other so-called apprentices as exempt from overtime pay requirements. Alvarez claimed that they were entitled to overtime pay under the DOL rule.
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Against that backdrop, the parties reached a settlement that is expected to benefit about 4,838 workers, the brief said. The proposed collective comprises people who worked as apprentices in New Jersey from June 7, 2014 to July 15, 2019, and in all other states — except for California, New York and Texas — from June 18, 2017 to Aug. 25, 2020, the brief said.
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