Chipotle Mexican Grill, the popular quick-service restaurant chain, could be facing a formal complaint from the National Labor Relations Board (NLRB) after it was determined by labor board prosecutors that the company violated federal labor law. The allegations stem from claims made by the International Brotherhood of Teamsters, asserting that Chipotle withheld raises from workers who had recently unionized.

The specific incident occurred at a Chipotle location in Lansing, Michigan, where employees were informed that they would not receive the same raises as their colleagues who had not unionized. The company is accused of illegally withholding the pay hike from these unionized workers. In July of 2022, the employees at the Lansing store voted in favor of union representation, becoming the only Chipotle location among the thousands of the chain's U.S. stores to do so.

If Chipotle chooses not to settle the allegations brought forth by the International Brotherhood of Teamsters, the NLRB's general counsel will proceed with a formal complaint against the restaurant chain. This development could potentially draw further attention to Chipotle's labor practices and outgoing CEO Brian Niccol, who is scheduled to join Starbucks as CEO in September.

Chipotle has responded to the situation by stating that it has been negotiating in good faith for the first union agreement at its Saginaw Highway restaurant. The company plans to resume negotiations later this fall, but has not specifically addressed the allegations raised by the NLRB. Chipotle also highlighted its benefits packages as part of its statement.

This is not the first time Chipotle has faced labor-related issues. In April of 2023, the company reached a separate settlement with the NLRB, agreeing to pay $240,000 to employees impacted by the closure of a Chipotle restaurant in Augusta, Maine, due to unionization efforts.

Chipotle, headquartered in Newport Beach, California, operates over 3,500 restaurants across the United States, Canada, U.K., France, Germany, and Kuwait, employing more than 120,000 individuals. The first contract for the Lansing store's union representation is currently under negotiation.