Over the last several years—even prior to and following the passing of the Affordable Care Act (ACA)—fast food chains have struggled with classifying employees, the designation of which can trigger ACA obligations. From chains like McDonald’s to Taco Bell, cases have arisen where workers are being titled as something other than “employee” in an effort to either sidestep the ACA employer mandate, which requires certain employers to offer healthcare to its “full-time employees,” and other employer obligations. In Chipotle’s case, there is much more beyond the burrito.
Just last month, two suits popped up where workers had two separate misclassification issues against Chipotle. On March 29, 2017, the case of Scott v. Chipotle Mexican Grill, Inc. [Case No. 12-CV-8333] found its way to the New York federal courts where the plaintiffs were allegedly advised that they were classified as “apprentices” and not managers in training. Under this alleged title, they were exempt, meaning they couldn’t partake in employee benefits. A total of 516 “apprentices” opted into the case. After consideration, which included the scope of employees’ work, as well as geographic location, the court ruled in Chipotle’s favor and dismissed the case without prejudice.
In a familiar-sounding case two days prior, however, as reflected in a Minnesota lawsuit, Case No. 17-1028, the appeals court confirmed that the plaintiffs could pursue their class action for alleged violations of the Fair Labor Standards Act (FLSA) based on allegations that they were required to work off the clock toward the close of their shifts. This isn’t the first time Chipotle has been taken to task with wage and hour issues, as just three years ago a similar situation occurred with the Colorado lawsuit in Turner v. Chipotle Mexican Grill, Inc., [Case No. 1:14-cv-02612-JLK]. Chipotle was not victorious here.
Many fast food chains over the years have committed similar sins: hours are seemingly doctored or cut from time cards in an effort to keep the “full-time” status at bay. This can be perceived as something other than a coincidence to avoid employer obligations to offer health coverage under the ACA’s mandates if the employees are not clocking in full-time shifts, despite working the qualified hours.
It’s a situation that requires constant care, where employers must come to realize that uniforms, pay stubs with company logos, and hours of work may qualify their workers as “employees.” While the case of the “apprentices” here didn’t proceed, that doesn’t mean that there isn’t going to be another round. Perhaps these companies should take a page from the Uber playbook and learn the outcome of these cautionary tales early, before they’re paying out more than they’re receiving.
