American fast-food chain Chipotle Mexican Grill is facing more legal trouble, this time for allegedly failing to compensate some of their employees for overtime work. The company may get some relief from the Trump Administration who is making a focused effort to undo many of the initiatives from the Obama years.
According to a lawsuit filed this week in a U.S. District Court in New Jersey, the company failed to adequately pay overtime to employees under a new federal rule enacted during the Obama administration. The law mandates that any non-manager making less than $47,476 a year must be paid overtime.
The rule was expected to go into effect on Dec. 1, but a judge in Texas blocked the overtime law before it was ever implemented. The Trump administration could appeal the court’s decision, however, he could also just let it go. For now, the lawsuit claims Chipotle should still be required to pay their employees overtime despite the injunction of enforcement.
The suit also claims that while court’s decision blocks the Labor Department from enforcing the rule, it does not technically prevent the rule from going into effect. The rule does not apply to private employers and the overtime rule should stay in effect until the court issues its final ruling.
“There’s been no finding that the rule is unlawful,” Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, the law firm representing the lead plaintiff told The Washington Post. “We think the rule went into effect and that companies should be paying people overtime.”
The lawsuit is seeking class action status and according to Sellers, the issue may apply to other companies as well.
“For conscientious employers, a suit like this reminds them that the rule is in effect and that they should be paying overtime,” Sellers said. “I don’t fully understand the mindset that has given rise to this broad belief that companies are not bound by this.”
However, according to USA Today, Tim Trujillo, a human resources consultant who founded Focus HR in Tehachapi, Calif., said that even if the lawsuit were to win in court, it might not be around for much longer because the Trump administration might choose to roll it back.
The Labor Department “will probably be reviewing and deciding whether they want to go forward with the same regulations” that came during the Obama administration, Trujillo said.
It says a lot about the culture of a company that is unwilling to pay hardworking low-income employees who work extended hours. Win or lose, the best companies thrive off of passionate, dedicated and happy workers. You can find more information on the federal overtime rule here. Chipotle has yet to comment on the pending litigation.