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Is Chipotle’s Shutdown Illegal Union Busting? Depends on Motive

July 25, 2022, 9:16 AM

Chipotle Mexican Grill Inc. will face federal labor board prosecution if agency lawyers find anti-union hostility behind its decision to shut down a store that was home to the burrito chain’s first workers to file for union recognition.

Chipotle, which owns and operates about 3,000 locations nationwide, flatly denied that the union drive had anything to do with permanently shuttering the restaurant in Augusta, Maine. The decision to shut down the store, which had been closed to the public since June 17, was based on not being able to properly staff it, the company said.

Chipotle United, made up of employees at the store who are trying to unionize, filed a charge with the National Labor Relations Board last week alleging the company retaliated against the workers for their organizing efforts by closing the store. The group filed its representation petition with the NLRB on June 22.

The NLRB’s handling of allegedly illegal store closings appears likely to take on added importance as the ongoing unionizing wave extends to retail and service-based companies with many small locations. Starbucks Corp. also has been accused of closing locations in response to union activity.

Employers have the power to close their entire business for any reason, the US Supreme Court ruled in 1965 in United Textile Workers v. Darlington Manufacturing Co. But employers violate labor law by shutting down part of their operations to chill union activity, the court said.

Investigators from the NLRB’s Boston region will gather evidence about the closure, and the regional director will issue a complaint against the company if she finds merit to the union’s charge.

Motivating Factor

The NLRB reviews allegations of anti-union retaliation of all types by examining whether employers were motivated by hostility toward unions. Chipotle United also filed a separate NLRB charge claiming the company fired two workers because of their union activities.

“Closures are kind of like firings,” said Matthew Bodie, a law professor at the University of Minnesota and former NLRB lawyer. “You can shut down a store or a plant if you have legitimate economic reasons, just like you can fire a worker for legitimate reasons. But if you do it because of anti-union animus, then it’s an unfair labor practice.”

Because there’s rarely direct, smoking-gun proof that an employer acted out of hostility toward unions, the NLRB often looks to circumstantial evidence, labor law observers said. For closures, the board considers evidence like the timing of the shutdown and how that connects to union activity, the behavior of management, and business decisions that the company has made at other, comparable locations, they said.

Anti-union animus doesn’t have to be the sole reason for closing a location in order to violate labor law, but rather one of multiple motivating factors.

“Sometimes I get the impression that it’s less of a science and more of an art when the board is trying to find motivation for an activity,” said Ginger Schroder of Schroder Joseph & Associates LLP.

‘Union Busting 101'

Chipotle blamed worker shortages for closing the store, saying the union activity was not a factor.

“Our operational management reviewed this situation as it would any other restaurant with these unique staffing challenges,” Laurie Schalow, the company’s chief corporate affairs officer, said in a statement. “Chipotle respects our employees’ rights to organize under the National Labor Relations Act.”

Chipotle kept the location open for training after it was closed to the public in June as it “went to extraordinary lengths” to staff up, including using two recruiters, Schalow said. But the company was unable to adequately staff the location, and had even more difficulties finding managers to run it, she said.

But Chipotle United’s lawyer, Jeffrey Young of Solidarity Law, said the company had hired enough workers to bring the crew to more than 25 members. Other Chipotle locations operate with about 20 workers, he said.

The closure wasn’t just about snuffing out the union drive at the Augusta store, Young said. The company also wanted to send a message to workers at a store in Lansing, Mich.—which filed a representation petition with the NLRB in July—as well as those in nascent organizing campaigns in New York and Ohio.

“From our perspective, this is union busting 101,” Young said.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com