Chipotle Settles Illness Claims Of 100+ Customers
Chipotle Mexican Grill (NYSE:CMG) has reached financial settlements with more than 100 customers who were sickened by foodborne illness outbreaks at the chain last year. Lawyers for the consumers announced the settlements. The terms of Chipotle’s settlements with customers are confidential, according to the lawyers representing them.
Last year’s string of food-safety problems created a number of headaches for the company. Outbreaks of E. coli, norovirus and salmonella linked to its restaurants sickened more than 500 people. The outbreaks battered the company’s reputation and stock price. Customers stayed away from the stores and sales plummeted. Business is reportedly down 20 percent to 30 percent, year over year.
Resolving the claims out of court prevents drawn-out public battles over the company sickening customers with foodborne illnesses. The claims have reportedly been settled over the last six months or so. The settlements involved people whose illnesses were verified by medical tests. Bill Marler, a lawyer for Marler Clark representing the customers, said, “The way that Chipotle has been handling the legitimate claims has been textbook appropriate. They’ve taken responsibility.”
Chipotle spokesman Chris Arnold said of the reported settlements that the company “does right by our customers and simply wanted to make things right for people who were affected by any of those incidents.” Chipotle still faces a federal criminal probe into food-safety matters. The company is also facing a civil lawsuit over allegations it misled investors about its food-safety controls.
Chipotle is working hard to revive its sales growth. Getting customers to come back has been difficult. The company has given away millions of dollars in free food and launched a new loyalty program aimed at attracting and retaining customers. The company also recently announced a free drink promotion aimed at students and is offering alcoholic drinks at half-price and two-for-one specials from 4:00 p.m. to 8:00 p.m. in eight states. Most importantly, the company has overhauled its food-safety practices.
Labor issues continue to plague the company. Roughly 10,000 employees from across the U.S. are suing Chipotle for unpaid overtime wages. A former worker recently won a lawsuit against the company over allegations of being fired solely because she was pregnant.