Chipotle faces fresh federal scrutiny more than year after mass firing of Latinos in Minnesota

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The SEC is scrutinizing the information Chipotle provided investors about the illegal worker scandal.
In December 2010, in the midst of an investigation by the federal Immigration and Customs Service, Chipotle made the controversial decision to suddenly fire about 450 Minnesota employees who couldn't prove they had valid work permits. The fired workers, mostly Latinos, represented over half of the fast-casual restaurant's Minnesota workers.

At the time, Chipotle executives argued they had no choice and by now they probably figured the episode was in the past, but this week, the Security and Exchange Commission subpoenaed information regarding the company's compliance with federal hiring laws and public disclosure requirements.

Businessweek reports that Chipotle could face fines as a result of the fresh investigation. The company has already spent upward of $1 million in legal fees related to the hiring practice probe, and its 2011 stock profits were hurt by about 8 cents a share due to the fact managers can no longer rely on cheap illegal labor.

Though fallout from the federal immigration probe most directly impacted Chipotle's Minnesota operation, the investigation subsequently looked into the restaurant's hiring practices in D.C., Virginia, Los Angeles, and Virginia. Chipotle has been "the highest-profile target of an Obama administration campaign against employers of illegal immigrants," the Wall Street Journal writes.

The SEC hasn't informed Chipotle as to the focus of its investigation, but an attorney for the company said a subpoena of this sort is typically aimed at ensuring that a company hasn't misled investors in its public disclosures.

Despite some bad PR, the probe hasn't slowed down the company. Last Friday, Chipotle's shares closed at $392.13, almost 18 times higher than their $22 debut in 2006. In the last year alone, Chipotle's shares have risen by more than 40 percent.

Furthermore, to ensure all Chipotle's new hires are legal workers, the company has implemented the Department of Homeland Security's E-Verify hiring system.

So, perhaps unsurprisingly, the real losers in this story are the 450 Minnesota Latinos who suddenly found themselves unemployed 17 months ago.

Previous coverage:
-- Chipotle launches mass firings of Latinos across Minnesota [UPDATE]
-- Chipotle denies stiffing fired workers
-- Chipotle protest: Eight arrested downtown
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4 comments
Erica
Erica

The real loser here really is Chipotle. The quality in food went to hell in a handbasket. At least those fired knew how to cook. Those who replaced the fired employees (at least at the Chipotle near Target on Nicollet Mall) don't know how to cook rice or season the meat properly. I stopped going to Chipotle when I realized how awful the food became with the changes in employees.

Miguelbobadilla
Miguelbobadilla

 WHAT!!! "So, perhaps unsurprisingly, the real losers in this story are the 450 Minnesota Latinos who suddenly found themselves unemployed 17 months ago" I have to share that my personal opinion on this statement is that it is incorrect! When a person works in a country that they have no legal immigration status it is in fact dishonest & breaking the law. I understand the background information as well as info on the conditions of where many immigrants originate from, However this is not a creditable or valid reason to enter a country illegally and work illegally. we are all in essence immigrants (unless u are American Indian). we all need to voice our opinions as to Immigration Reform, however we can not enable people to be dishonest and break the law!

Good
Good

Yup and 450 minnesota people found jobs that are legal to work here

Joe
Joe

 Every Chipotle went to hell when this happened.  I don't eat there anymore.

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