SEC Probing Chipotle Over Claims The Burrito Chain Hired Undocumented Workers

In this photo, a Chipotle Mexican Grill sign hangs above one of the chain's restaurants in Chicago, Illinois. The SEC is investigating Chipotle for its alleged hiring of undocumented workers.

By Lisa Baertlein

May 18 (Reuters) - Chipotle Mexican Grill Inc received a subpoena from the U.S. Securities and Exchange Commission as part of an expanding investigation into its alleged hiring of undocumented workers.

The Denver-based company fired about 500 employees more than a year ago following audits by the U.S. Department of Homeland Security's Immigration and Customs Enforcement (ICE) arm.

Chipotle said on Friday that it received the subpoena May 17 and that it intends to fully cooperate with the SEC's investigation.

Homeland Security and the criminal division of the U.S. Attorney's office for Washington, D.C., already are conducting probes into the company's compliance with immigration laws.

The SEC subpoena requested "information regarding our compliance with employee work authorization requirements, our related public statements and other disclosures, and related information," Chipotle said in a filing.

Michael Wildes, an immigration attorney and a former federal prosecutor who is not involved in the case, said it is "not common at all" for the SEC to get involved in immigration matters.

"It's often a ping-pong between the Justice Department and immigration authorities" with the Department of Labor at times stepping in, said Wildes.

Chipotle attorney Robert Luskin said in an email "it is not at all unusual for the SEC to join an investigation under these circumstances to determine whether the company has been forthcoming in its public statements."

Luskin, a top Washington lawyer, said he is "very confident that the SEC will find that the company fulfilled all of its obligations."

A spokeswoman for the SEC declined comment.

The popular chain is the highest profile U.S. company to come under the scrutiny of ICE since it shifted enforcement to employers rather than workers in 2009.

Unlike many rivals, Chipotle owns and operates its more than 1,000 U.S. restaurants and is ultimately responsible for hiring.

The company is known for its ability to control costs, particularly labor related expenses, while expanding rapidly.

Chipotle shares closed at $392.13 on Friday, almost 18 times higher than their $22 debut in 2006.

Comments

[NancyY]

03:04 AM on 05/22/2012

Chipotle should have learned a lesson from the Pappas restaurant chain in Houston, TX several years ago. An illegal alien server at one of their restaurants exposed about 3500 people to the Hepatitis A virus, and everyone exposed had to get vaccinated. Yeah, Pappasitos, good luck finding all those people.

I'm a reasonably good cook, and I don't have any such diseases that I know of, so I think I'll just prepare our meals at home, and every once in awhile we'll go to a NICE restaurant where we won't have to worry about such problems.

[fortressfountain]

06:09 PM on 05/21/2012

Arent they owned by mcdonalds.

[rinman9]

04:04 PM on 05/21/2012

Grea,t now fine chipotle up the culo and ship the illegals out problem solved.

[The Man on the street]

01:05 AM on 05/22/2012

Fines aren't enough, since they're just factored into "the cost of doing business". Because Chipotle Corp HQ is responsible for hiring, the officers in that department should be facing criminal prosecution... *only* the specter of real Federal Prison time will solve the problem, and send a loud, clear message to everyone else in Corporate America since no executive anywhere is going to risk prison just to save on payroll.

[aymsley]

01:45 PM on 05/21/2012

"The company is known for its ability to control costs, particularly labor related expenses"...
On the backs of workers...Hiring illegals to work cheap.
The solution...stop eating there. Or is it ok to exploit the poor if you show profit to your investors? Welcome to Romneyworld...

[69superbike]

12:19 PM on 05/21/2012

The Chipotle's by me lost their flavor. Once the Mexicans were fired they hired HS kids that can't cook and do more texting then helping costumers. Now when I see the HS kids working the shop I walk out. Chipotle did pay the Mexicans well and that money was going into the communities they lived in. The ones I talked with were trying to get citizenship, but you need money for that.

[jonny dipstick]

10:45 AM on 05/21/2012

This isn't news. The one I used to go to was full of undocumented workers. I would talk to them sometimes because I had students that were undocumented. Its a common thing. At least Chipotle paid them alright. Go take a look at the nearby farms and dairies and there you will find a more modern form of slavery.

[The Man on the street]

01:08 AM on 05/22/2012

Slavery is *exactly* what this is about - Corporate desire for illegal-alien slave labor.

[jonny dipstick]

09:16 AM on 05/22/2012

We need to push for the harshest rules against the employers that do this.

[purenergy]

09:18 AM on 05/21/2012

Undocumented workers in a restaurant?!?!?!?! Oh nooooooooooo..... on any given day INS could walk into ANY food service business and find many undocumented workers. Its like pulling over Willie Nelson's tour bus and finding pot.

[Thiefy McBackStabb]

08:40 AM on 05/21/2012

Disappointed with this? Better not visit a McDonalds in Texas.

[Bob binard]

07:41 AM on 05/21/2012

Of course they don't deport anyone caught working there..They just like the Big Check they can extort out of the Business then let the workers go get a job at another place they can fine.

[Viper1st]

09:59 AM on 05/21/2012

You are correct ~

"According to testimony delivered by Janet Napolitano, US Secretary of Homeland Security, to Congress in October 2011, since Fiscal Year 2009 ICE (Immigration and Customs Enforcement) has “audited more than 6,000 employers suspected of hiring illegal labor, debarred 441 companies and individuals, and imposed more than $76 million in financial sanctions.” Additionally, for Fiscal Year 2011, ICE has criminally arrested 221 employers accused of employment violations. "

http://www.fadv.com/blog/dhs-immigration-update/

[imusintheevening]

12:45 PM on 05/21/2012

just put one CEO in jail for hiring illegals and 8 million new jobs will become available overnight

[Bob binard]

05:00 PM on 05/22/2012

I agree.. But Obama doesn't want to stop illegals..he wants to fine the company to feed his spending.

[JazzHombre]

07:40 AM on 05/21/2012

A burrito chain hiring undocumented workers? Now that's a suprise

[starlitkate]

06:02 AM on 05/21/2012

The goverment should have known that if we have a restaurant in the US that says 'Chipolte' then most likely there are illegals working there. It's bad enough we don't get real Chinese food but there is nooooo way we are gonna have American's making El Paso tacos. If we want that we'll go to Taco Bell! We want real Mexican food!

[moonlit]

03:45 AM on 05/21/2012

Surely the SEC has bigger fish to go after, such as Goldman Sachs.

[Bob binard]

07:45 AM on 05/21/2012

They are owned by McDonalds..Fish don't get much bigger than that.

[Anthony Garnett]

10:06 AM on 05/21/2012

Chipole is not owned by McDonalds in 2006 McDonald's fully divested itself

[moonlit]

10:23 AM on 05/21/2012

McDonald's bought an interest in them for some time. Chipotle was not created by McDonald's and they've retained the things that made them successful: healthful but cheap/fast food that incorporates organic and humane meat and dairy, some local ingredients in season, etc.

[moonlit]

03:35 AM on 05/21/2012

I'd rather see them crack down on Cargill and all the slaughterhouses in western Kansas who hire only illegals and make them work for slave wages in illegal, dangerous conditions.

[The Man on the street]

01:10 AM on 05/22/2012

No reason why they can't do that also!

[moonlit]

03:22 AM on 05/21/2012

Chipotle serves nutritious food that tastes fantastic, is as cheap as any fast food, buys some food from local producers, avoids growth hormones in milk products, and uses some humanely raised meat.

No wonder they are being targeted.

[Nomadius]

09:52 AM on 05/21/2012

F & F !!

[AngryMonkey]

11:46 AM on 05/21/2012

And they are hiring Mexicans for a Mexican Grill. Not like going to a Greek restaurant and everyone working there is a Mexican. I figure the food at Chipotle is better for it. But again there are enough legal Hispanics in the country so hire them instead.

[moonlit]

03:20 AM on 05/21/2012

And Chipotle is the only one doing this?

[Anthony Garnett]

10:07 AM on 05/21/2012

No many restaurants, landscapers, and nanny services hire undocumented workers

[LJ P]

11:33 PM on 05/21/2012

And you know what, we should not use any of their services or products. I make any landscapers I use prove the citizenship of every worker on my property. I don't go to restaurants I know hire illegals. Everyone should stop going to Chipotle. IF you know of so many restaurants that hire illegals, why are you patronizing them?