Chipotle Mexican Grill (NYSE:CMG) shares gain Tuesday, on word the chain has agreed to pay $240,000 to the former employees of an Augusta, Maine, location as part of a settlement for closing the restaurant when workers tried to unionize.
Chipotle denied wrongdoing, despite settling the lawsuit with the federal labor board and the union.
“We settled this case not because we did anything wrong, but because the time, energy and cost to litigate would have far outweighed the settlement agreement,” Laurie Schalow, Chipotle’s chief corporate affairs officer, said on Monday.
Employees at the Chipotle restaurant filed a petition to unionize under Chipotle United in late June, becoming the chain’s first outlet to do so. Prior to the filing, workers had already walked out in protest of working conditions and understaffing.
Less than a month later, Chipotle closed the restaurant, citing staffing issues and saying it respected workers’ right to organize. However, in November, the National Labor Relations Board found that the burrito chain violated federal labor law when it closed the restaurant and stopped organizers from being hired at its other locations in the state.
While Chipotle United counted the settlement announced Monday as a win, it fell short of reopening the closed location.
Now, former employees at the shuttered Augusta location will receive between $5,800 to $21,000 from Chipotle, dependent on their average hours, pay rate and the length of their tenure. Chipotle will also offer to put all those workers on a preferential hiring list for other Maine locations for one year.
CMG shares moved higher $4.41 to $1,652.23.