There may be another labor scandal on the scale of Postville in the making. In an unusual move this month, a high-level economic watchdog has stepped into an investigation concerning allegations of employment law violations concerning illegal immigrants at a popular nationwide food chain. A Securities and Exchange Commission probe into hiring practices at Chipotle Mexican Grill has resulted in a subpoena for additional information.
The investigation focuses on the company’s alleged hiring of a large number of undocumented workers. The company, which has 15 locations in Wisconsin, had fired about 500 employees following an immigration audit conducted by federal officials.
Chipotle received the subpoena on May 17, and company leaders say they will fully cooperate with all government investigations. The Department of Homeland Security is already involved in the probe, and a criminal division of the U.S. Attorney’s office in Washington, D.C., has joined as well. The company is accused of violating a slew of federal hiring laws throughout the nation.
Immigration attorneys say that the involvement of the SEC in an immigration matter is highly unusual. Generally, those cases are handled by Justice Department and immigration authorities, with an occasional intervention from the Department of Labor, which oversees the implementation of hiring practices throughout the United States.
The Immigrations and Customs Enforcement team switched its focus from workers to employers in 2009, launching a new era of immigration investigation. Chipotle is the highest-profile firm to come under fire for inappropriate hiring practices since the shift.
Unlike many of its other fast-food rivals, Chipotle’s corporate office owns all of its 1,000-plus restaurants. What that means is that the corporation — not the individual stores — is responsible for hiring policies and procedures.
It is unclear what the impact on either the company or the restaurants will be. One key to Chipotle’s success and rapid expansion has been its ability to keep down labor costs.
Source: ThomsonReuters News & Insight, “SEC subpoenas Chipotle in hiring probe,” Lisa Baertlein, May 18, 2012