U.S. labor board prosecutors have determined that Chipotle Mexican Grill (NYSE:CMG) illegally refused to grant raises to workers at a Michigan restaurant after they became the first and only employees of the fast-casual chain to unionize.
The National Labor Relations Board’s (NLRB) general counsel will issue a formal complaint against Chipotle unless it settles the claims made by the International Brotherhood of Teamsters. Workers at the Lansing, Michigan, restaurant voted 11-3 to join the Teamsters in 2022, but have yet to secure a contract with the company.
The union alleges in a complaint filed last year that Chipotle withheld raises from the store’s employees by falsely claiming they were ineligible for pay increases due to their union status. Chipotle and the Teamsters’ lawyers did not immediately respond to requests for comment.
Last year, Chipotle agreed to pay $240,000 to settle a separate NLRB case accusing the company of illegally closing an Augusta, Maine, restaurant in response to a union campaign there. While denying wrongdoing, Chipotle also agreed to post notices about workers’ legal rights at 40 stores throughout New England.
If the general counsel issues a complaint in the Michigan case, it will be heard first by an administrative judge and then by the five-member NLRB board appointed by the president, whose decisions can be appealed to federal appeals courts.
The NLRB is currently facing multiple lawsuits, including at least five filed this month, challenging the constitutionality of its internal enforcement processes. Several companies, such as rocket maker SpaceX and pipeline operator Energy Transfer (NYSE:ET), have sued the agency after being hit with complaints alleging illegal labor practices.