It all comes down to a federal rule that should have taken effect in December.

By Jillian Kramer
Updated June 09, 2017
Credit: Joe Raedle / Getty Images

A much-anticipated federal law was supposed to take effect in December, entitling overtime pay to hourly employees who earn less than $47,476 a year—which, if you're counting, is a good chunk of the U.S. population—and who work more than 40 hours a week. But an injunction late last year pushed pause on the law.


That's the real question behind a lawsuit filed Wednesday against fast-casual chain Chipotle. Employees allege the chain should still be paying its staff overtime wages because the court that issued the injunction never came to a final decision on the law—and it definitely never repealed the legislation. With that in mind, the workers say, the new law did take effect on Dec. 1 as planned—and Chipotle owes back pay.

"There's been no finding that the rule is unlawful," said Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, the law firm representing the lead plaintiff. "We think the rule went into effect and that companies should be paying people overtime."

In fact, the firm is arguing that the injunction, which came through a Texas court, should only apply to Texas employees—if it applies at all, that is.

The lawsuit was filed in New Jersey. The lead plaintiff—a 55-year-olf woman who worked for the chain for four years—said in a statement she was "crushed" when Chipotle decided to follow the injunction rather than the new regulation.

Chipotle declined to speak to The Washington Post about the suit. But it did tell the newspaper that "a lawsuit is nothing more than allegations, and the filing of a suit is in no way proof of any wrongdoing."

Previously, only those employees who earned less than $23,660 a year would be eligible for overtime pay. The new law was a huge expansion, and was highly anticipated by many workers, especially those in the restaurant industry.

The industry suffered another blow this week when the Trump administration removed guidelines that strongly suggested franchise ownders do a better a job of looking out for their workers from the Labor Department's website. Of course, their removal doesn't change or effect laws already in place. But their deletion does seem to send a message to employees that this administration will side with business interests over the rights of minimum-wage workers.