Chipotle Mexican Grill Inc illegally withheld raises from employees because they unionised, US labour board prosecutors say.

The US National Labor Relations Board’s (NLRB) general counsel office concluded that the burrito chain violated federal law by excluding its one unionised US restaurant from raises being provided to other staff, agency spokesperson Kayla Blado said last Friday. The NLRB prosecutors also determined that the company violated the law by telling workers at the location in Lansing, Michigan, that unionisation was preventing them from getting a raise, and by punishing a pro-union employee to discourage activism. 

Absent a settlement, the NLRB’s regional director plans to file a complaint against the company on behalf of the agency’s general counsel. 

Chipotle didn’t provide a comment in response to an inquiry.

Complaints issued by NLRB regional directors are considered by agency judges whose rulings can be appealed to labour board members in Washington and then into federal court. The agency can order companies to change policies or issue back pay, but lacks authority to make them pay punitive damages for violations.

The case could compound scrutiny on the labour relations record of Chipotle and its departing chief executive officer Brian Niccol, who will take the reins at Starbucks Corp next month. Starbucks and Apple Inc have also been accused by NLRB prosecutors of trying to discourage unionisation by excluding newly-unionised locations from raises awarded to non-union counterparts. Both companies have denied wrongdoing, and Apple reached a contract deal with its first unionised US store last month.

Microsoft Corp, Volkswagen AG, Wells Fargo & Co, and Amazon.com Inc have also experienced successful unionisation efforts since the start of the pandemic, among others. But workers at many of these companies have struggled to secure collective bargaining agreements with management, and labour organisers say providing new perks only to non-union sites is a potent union-busting tactic that discourages more locations at a company from organising.

Employees at the Michigan Chipotle restaurant voted to unionise two years ago - a first among the company’s thousands of US sites - but have yet to finalise a contract. The two sides have made substantial progress in negotiations, but Chipotle has stonewalled in recent months on key issues including pay raises, employee and union bargaining committee member Harper McNamara said.

The NLRB also issued a complaint in 2022 accusing Chipotle of illegally shutting down a Maine restaurant because workers there were trying to organise; the company ultimately agreed to pay US$240,000 to affected employees as part of settling that case.

McNamara said he hopes Niccol’s departure will prove to be an opportunity for Chipotle to pivot away from the “squeamish” approach it has taken towards unions. At Starbucks, which in February announced a new commitment to end hostilities with the union Workers United, Niccol’s selection has raised concern among some staff. 

In an internal meeting following the Chipotle executive’s appointment, senior Starbucks leaders were asked about Niccol’s track record with unions and whether the coffee chain would continue its ongoing contract negotiations, Bloomberg reported on Aug 23. The company’s human resources chief Sara Kelly told colleagues that the talks would continue in good faith.

  - Bloomberg