Chipotle to pay workers after closing store that tried to unionize

Chipotle Mexican Grill 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 in a statement to CNBC 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, dependant on their average hours, pay rate and the length of their tenure. Chipotle will also offer to put all of those workers on a preferential hiring list for other Maine locations for one year.

Roughly 40 stores in Maine, New Hampshire and Massachusetts will have notices posted saying it won’t close stores or discriminated based on union support. Those locations are under the leadership of the Chipotle regional manager who blackballed pro-union workers from jobs at other locations, according to Chipotle United, which is not affiliated with any larger unions.

To date, just one Chipotle location has successfully unionized. A restaurant in Lansing, Michigan, voted in August to unionize under the International Brotherhood of Teamsters.

The burrito chain hasn’t seen an avalanche of union petitions after organizers’ initial win in Michigan, unlike Starbucks, which has seen more than 290 locations unionize in a little over a year. But Starbucks Workers United has accused the company of employing similar anti-union tactics, including shuttering stores. The coffee chain denies all allegations of union busting, although former CEO Howard Schultz is set to testify Wednesday in front of a Senate panel about the company’s behavior.

— CNBC’s Kate Rogers contributed to this report.