News

As Chipotle Restaurateur program reaches 200, hiring practices still under fire

April 13, 2011

As Chipotle Mexican Grill’s co-CEOs Steve Ells and Monty Moran announce the promotion of the company’s 200^th Restaurateur, an article was published by Reuters highlighting the chain’s hiring practices in the wake of several U.S. Immigration and Customs Enforcement audits (ICE).

The Restaurateur is a position reserved for its most elite restaurant managers who are all handpicked by the CEOs.

Once a manager is accepted into the program, they may be asked to mentor an additional restaurant, subsequently also taking on a third and fourth location. Because of their ability to run restaurants and develop the people around them, Chipotle tapped people from within its program to open its first restaurants in Toronto and London, and will open its first restaurant in Paris later this year with one of its Restaurateurs.

“Our 200 Restaurateurs represent a growing group of top-performers who have worked their way up from hourly crew positions. These top-performing leaders are poised for an incredible future with Chipotle,” Moran said. “These are the people who could be our future executives and officers, to whom we will entrust the leadership of our entire organization.”

Chipotle began its Restaurateur program five years ago, shortly after Moran joined the company. In addition to earning a regular salary and bonus, Restaurateurs receive bonuses for each crew-member they develop into a general manager. They also play an increasingly important role in regard to company operations, with some Restaurateurs overseeing several restaurants and/or mentoring nearly half of the company’s restaurants nationwide.

While this program has been a success for the company, other aspects of its hiring and labor practices are being called into question.

The article by Reuters tells the story of several employees who gained employment at the chain even though managers knew they did not have proper documentation. In some cases, employees were hired even after their Social Security numbers came back as being false.

The first known ICE audit resulted in the firings of approximately 450 undocumented workers in Minnesota with auditional audits being responsible for the loss of at least 100 more employees in the Washington, D.C., and Virginia markets.

From Reuters:

It isn't hard to find an illegal immigrant working in a U.S. restaurant: estimates of the percentage of illegal workers in the food service industry range from around 10 to as much as 40.

While many chains rely on them, Chipotle was the highest profile company caught when immigration enforcement strategy switched to cracking down on employers rather than workers in 2009.

The company said it believes its troubles in Minnesota are largely behind it. But a bizarre incident from Washington suggests it is struggling to stabilize the situation there. In March, workers in the chain's Columbia Heights restaurant were called to the back of the restaurant for a meeting, while new workers took their places up front. …

Given the terminations in Minnesota and Washington, Reuters asked the company why it has not yet adopted E-Verify, the verification system recommended but not required by ICE, in all of its markets. The company did not respond to the question. ...

From 2006 to 2010, average labor costs per restaurant rose just 1.8 percent to $444,244, while average sales at restaurants open at least one year rose 14.2 percent to $1.8 million, based on data from Chipotle financial filings.

Chipotle has attributed its market-leading labor efficiency to smart staffing and a talent development program that allows crew members to work their way up to management while also lowering turnover and training costs.