Chipotle Mexican Grill Case Study: Legal and Ethical Issues with Undocumented Workers

This case study analyzes the legal and ethical issues faced by Chipotle Mexican Grill due to the employment of undocumented workers. It provides recommendations for future compliance and discusses the use of the e-verify system and the IMAGE program.

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Contents
Introduction......................................................................................................................................2
Question 1........................................................................................................................................2
Question 2........................................................................................................................................3
Question 3........................................................................................................................................4
Question 4........................................................................................................................................5
Question 5........................................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
Chipotle Mexican Grill was doing and earning well with nearly 1100 restaurant in the
USA in 2011 (Corp-realty.com, 2012). In addition to this, the share price of the company was
also increasing over the period. However, the issue started when the Obama administration
decided to make the focus on undocumented workers in order to identify the total illegal
immigrants in the country (DeFilippis, 2016). Immigration and Customs Enforcement (ICE)
made an inquiry into Chipotle and in the findings, many of the employees have founded
undocumented immigrants. In the following report, some questions related to the subjective case
studies will be answered. Further, certain recommendations will also be provided to the company
for future
Question 1
As mentioned in the introduction part, Chipotle was doing economically good at the time
of inquiry made by ICE. In such a manner, the company seems to be capable to meet out the
operative cost. However to say that the company has high operating cost in comparison to other
businesses as the same promises customers to provide organic, fresh and locally sourced food.
The labor cost of this company is increasing day by day (Sen, 2018). This is a concern for the
company. At the time of the investigation, many of the workers left the employment that were
not eligible to work in the USA. Further to many of the workers, Chipotle showed an outer way.
The company had no other option except dissing them. Not only in the legal sense but according
to the code of ethics too, the co-chief executive officer of the company was required to adhere
the rules and regulations of nation and public as well as private regulatory agencies. In such a
manner, the company was required to dismiss the illegal and undocumented workers. By doing,

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so the company has not violated any law but the same ensured the compliance of immigration
law of USA.
Further, because of giving the employment to illegal immigrants, the company could face
criminal liabilities as well. In the year 2011, Criminal division of the US Attorney’s office in
Washington also became a part of the investigation running by ICE. The reason behind the same
was to get the additional information from Chipotle. Chipotle could held liable for the criminal
charges if US attorney concluded that Chipotle knowingly provided employment to
undocumented people. As no such thing proven, therefore the company is not liable to pay the
subjective charges.
Question 2
According to the requirements of ICE, Chipotle had to dismiss the employees who were
illegal immigrants in the form of undocumented workers. By dismissing these employees,
Chipotle made a legal step but breached certain ethical standards. The company is required to
show their workers a way out. Out of these workers, many of them were completely dependent
on Chipotle for their earnings. It was a sudden decision of Chipotle and the employees are not
able to search for new employment in such a small period. Many of the employees felt otherwise
as they were employed with Chipotle since long periods and they felt that the company has not
considered their internet even for a second. One of the fired employees named Yeny Portales
stated that we have dedicated the efforts and time to the company and the same made us feel
terrible by dismissing us in this manner. Further, he stated that it seems like the company has no
value of the dedicated employees and we never did matter to the same.

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Further, as per the code of ethics for the co-chief executive officer, the same was required
to promote the ethical culture among employees. Because of IEC requirements, the company
dismissed and continuously dismissing the employees and therefore this would not wrong to
state that IFC is forcing Chipotle to take the unethical steps in respect to the employees only. If
to consider the other areas and stakeholders dismissal of such employees was a legal as well as
ethical step as according to the code of ethics, it becomes the responsibility of the CEO to act in
the best interest of the company. The action of the company can be treated unethically in relation
to the employees as the company has made no good to them and the only reason behind the same
was requirement put by IEC.
Question 3
Despite the unlawful immigration status, the US constitution provides certain rights to the
people who are undocumented immigrants and working in the US. It means the basic human
rights provided by the constitution are applicable to everyone despite that the fact that whether
proper documents were there or not. One of the significant rights is stated under the fourteenth
amendment in which it is stated that every state shall provide the equal protection of the laws to
everyone. In addition to this, the amendment says that states shall not deprive a person of liberty,
life or property without following due process of law (Bray, 2019). It means the undocumented
workers have the right to defend themselves if arrested or someone sues them in a civil matter
and the right to receive notices. In a conclusive way this is to mention that yes, undocumented
workers also earned certain rights. If to talk about the wages this is to state that often companies
give them higher wages than they could get in their home countries and this is the reason that
they leave their home country and move to another company to find the employment.

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Question 4
After reviewing the subjective case, this is to say that the company should use the e-
verify system for the new hiring. Because of the absence of this system, the company faced the
issue of hiring illegal immigrants as employees. Further, if this system would not in place, there
is a possibility of continuation of such hiring in future too. Many benefits are there of this
system. The lead benefit of this system is that the same is able to confirm the citizenship status of
people. In the absence of this system, it is not possible for Chipotle to check the citizenship of
each employee. In addition to this, there is a biometric verification feature in the e-verify process
that gives the employer an option to check the identity theft in the process of checking the
employer eligibility. According to The United States Department of Homeland Security, this
system is the best mean available to check the eligibility of new employees at the time of hiring
them as the same eradicate the social security mismatch letters in a virtual manner (Eggleston &
O'Brien, 2018).
Nevertheless, this would be wrong to state that e-verify system gives 100 percent
assurance about the citizenship status of a person as many of the times, people not update their
record with Social Security Administration (SSA), yet the positives of this system cannot be
ignored. In the past, Chipotle found to give the undocumented workers employment that affected
the financial performance of the company negatively. In addition to this company also faced the
loss of goodwill.

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(Stana, 2009)
Not only for the new hiring, but Chipotle also should use the e-verify system for its
current employees as well. As many of the employees have founded illegal immigrants in the
inquiry made by IEC, there is a chance to be more. In order to ignore any potential liability and
to ensure good governance, the company is advised to use this means for current employees also.
Question 5
The process of employee verification is a tedious one. However, some technology such as
E-verification process is there but the employer needs to be educated enough to use the
technology properly. In order to follow the laws properly, ICE has started the IMAGE program.
It is a certification process. By participating in this program, companies can reduce the risk and
number of unauthorized employment. As the main features of this program, US Citizenship and
Immigration Services and ICE shall provide training and education to the members regarding
appropriate hiring procedure, use of the e-verify system and fraudulent document detection
(DeScherer, 2015). According to the belief of DHS, the company who will IMAGE certification

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program would become an industry standard. These companies can say to others that “Have a
look at us, we have used the IMAGE program and the same helped us (Ice.gov, 2019). The
program makes the members eligible to compare the data from Form I-9 of an employee.
As this program provides many positives to a business, Chipotle also should join the
same. Until the company would not be a member of the IMAGE program, the same will not be
able to use the e-verify system in an effective manner. In conjunction with this, Chipotle can also
prove itself as an industry leader and standard by using this program and therefore the same is
advised to Join the IMAGE program.
Conclusion
In the presented report, the focus has been developed in many of the aspects related to the
reviewed case study. In a conclusive manner, this can be stated that the labor cost was a concern
for the company despite the good economic condition of the same. The company had to dismiss
the undocumented employees in order to meet the legal requirements and in such a manner, the
same has made an unethical act in concern of its employees. The company dismissed the
employees who were engaged with the same since so long but this action was necessary to take
as the CEO was expected to act in the best interest of the company. At last in order to ensure the
legal compliance in the future company is advised to adopt the e-verify system. This system will
make the employee able to check the citizenship status of the company. The company is also
advised to join the IMAGE program to get the proper knowledge and training.

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References
Bray, I. (2019). Legal Rights of Undocumented Immigrants. c https://www.lawyers.com/legal-
info/immigration/general-immigration/legal-rights-of-illegal-immigrants.html
Corp-realty.com. (2012). Chipotle Mexican Grill to Open First Two Louisiana Restaurants.
Retrieved From: https://corp-realty.com/2012/01/09/chipotle-mexican-grill-to-open-first-
two-louisiana-restaurants/
DeFilippis, J. (2016). Urban Policy in the Time of Obama. US: U of Minnesota Press.
DeScherer, D., D. (2015). Wage Hour Compliance Handbook, 2016 Edition. US: Wolters
Kluwer Law & Business.
Eggleston, S., B. & O'Brien, B., M. (2018). Labor and Employment in California: A Guide to
Employment Laws, Regulations, and Practices. New York: LexisNexis.
Ice.gov. (2019). Introduction. Retrieved From: https://www.ice.gov/features/image
Sen, C., (2018). The Trouble With Chipotle Is Labor and Food Costs. Retrieved From:
https://table.skift.com/2018/02/14/the-trouble-with-chipotle-is-labor-and-food-costs/
Stana, R. M. (2007). Employment Verification: Challenges Exist in Implementing a Mandatory
Electronic Verification System. United States Government Accountability Office, 7.