Thursday, March 17, 2016

Administrative Hearing Sheds Light on Chipotle Operations

An administrative law case in which Chipotle was found to have violated federal labor laws sheds new light on working conditions and operations at the troubled faux-Mexican restaurant chain. The administrative hearing, as reported by Washington Post, found that Chipotle fired an employee for a tweet that seemed to complain about the company’s wages, barely above minimum wage. Chipotle’s social media policy was found to violate federal laws, so the company was ordered to reinstate the worker with back pay.

What is interesting about the case, though, is the company’s version of the story. It claimed that it fired the worker for circulating a petition among workers to allow breaks. The administrative judge was not convinced that this was the reason for the firing, but consider what the company’s side of the story says about Chipotle’s management practices, working conditions, and operations.

I have noted previously that for Chipotle to make a profit, the food-assembly workers must work at superhuman speeds. If they are merely impressively fast, that is not fast enough, and the restaurant won’t make enough products to pay the rent. Considering that the food-assembly station is the key constraint in Chipotle’s profit potential, you would expect that the restaurant chain would employ high-skill, highly trained food assembly workers and rotate them regularly, almost like a basketball team, giving them a chance to catch their breath so that they can work in a peak performance state. Instead, what we learn here is that the most crucial work in the company is delegated to minimum-wage workers who have virtually no training and aren’t even allowed bathroom breaks. If you are a Chipotle customer, how do you feel about getting food custom-made by a worker with no formal training who may have been standing in the same spot for three hours without a chance to go to the bathroom? Given that setup, what are the chances that the food you are getting is actually clean? And for observers of the company, does anyone still believe that Chipotle management really wants the company to survive?