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National Fast Food Chain Faces Class-Action Lawsuit for Alleged Overtime Violations

On June 7, 2017, Carmen Alvarez filed a Class and Collective Action Complaint with the District Court of New Jersey against her former employer, Chipotle Mexican Grill, Inc., for failing to pay her overtime as required by the Fair Labor Standards Act ("FLSA") as well as New Jersey's State Wage and Hour Law. Alvarez argues that Chipotle classified her as an "apprentice" in an attempt to circumvent the overtime protections set forth by the FLSA and New Jersey law. Due to this classification, Alvarez contends that she and similarly situated "apprentices" worked forty or more hours per week without overtime compensation.

Alvarez worked as an apprentice at four different Chipotle restaurants in northern New Jersey between March of 2014 and Mach of 2017. She contends that Chipotle's "apprentices" are employees in training to become general managers of Chipotle restaurants, and that Chipotle classified them as "executive" and/or "administrative" employees, thereby exempting them from the overtime requirements set forth in the FLSA and New Jersey law. Once the United States Department of Labor ("the DOL") promulgated a final regulation in 2016 addressing the overtime requirements and exemptions ("the Overtime Rule"), Chipotle stopped paying apprentices a set salary. Instead, the restaurant chain converted its apprentices to hourly employees and began paying them a premium for hours worked in excess of forty per week.

Recognizing that on November 22, 2016, the United States District Court for the Eastern District of Texas enjoined the DOL from implementing and enforcing the overtime rule, Alvarez argues that the Eastern District of Texas did not stay the effective date of the Overtime Rule or otherwise prevent the Overtime Rule from going into effect, which Alvarez contends occurred on December 1. Alvarez goes on to argue that the Eastern District of Texas's decision meant that although the Department of Labor could not enforce the overtime rule, the decision did not keep the rule from going into effect for private companies and that workers are free to try and enforce the overtime rule themselves.

The future of the overtime rule, promulgated during President Obama's tenure in office, is unclear under President Trump. Secretary of Labor Alexander Acosta has indicated that the Department of Labor would open a request for information, which labor advocates believe could weaken or further delay the rule.