A federal lawsuit filed against Mexican fast-food chain Chipotle by its shareholders alleges that company leaders failed in their response to a series of food-borne illness outbreaks that sickened customers across the country. This lawsuit was filed by shareholders who accuse the top company brass of unjust enrichment while making a series of missteps. The company’s two co-CEOs earned $14 million each last year. They and eight other executives are named in the lawsuit, according to The Denver Post.
Although this particular lawsuit focuses on the alleged business failures of the firm and its leaders – not the 500-plus people who were actually sickened in these E. Coli outbreaks – the filing does shed light on the company’s reportedly poor food safety procedures and lacking response once serious problems were exposed. The company’s stock lost nearly half of its value from the time the outbreaks become public in August 2015 (when shares were at $757) to just last week (when shares were at $395). In addition to seeking monetary damages for shareholders, plaintiffs are demanding better internal policies that will ensure the company complies with food safety laws in the future.
The company operates nearly 2,000 restaurants in the U.S. and has more than a dozen abroad. The company last year and into this year was embroiled in a food safety scandal after hundreds of people got sick. One of those cases, referenced in this lawsuit, was a norovirus outbreak in Washington state. The company has never publicly acknowledged that particular outbreak, in which it is alleged a supervisor ordered a sick worker to come in to work – even though she was sick – unless she could find a replacement. The worker spent four hours on the clock, vomiting. This, a state health inspector later noted, was “the smoking gun” in the outbreak that ensued, causing at least 234 people who dined at the restaurant to become sick with acute gastrointestinal illness.
Rather than immediately contact state health officials, the chain reportedly shut down the restaurant and sanitized it before calling and notifying the state.
Around this same time, there was a salmonella outbreak at restaurants in Minnesota, caused by tomatoes. Sixty-four people were sickened and nine people were hospitalized.
Then in October, more than 50 people got sick in nine states. A total of 20 people were hospitalized. Yet the company wouldn’t acknowledge the outbreak until the following month, when it shuttered 43 of its restaurants in Washington and Oregon. Signs on the doors never indicated a public health issue. Rather, they referenced “supply issues” or “equipment problems.”
Then in Boston, more than 140 students got sick after eating at a Chipotle near campus – and dozens more were sick as a result of coming in contact with those individuals, because the norovirus they contracted was highly contagious. Health inspectors indicated the restaurant had a problem with keeping steak and chicken at below safe temperatures.
From there, outbreaks continued in North Dakota, Oklahoma, Kansas and other states. A total of 500 were counted, though food safety experts believe the total number is probably 10 times that, as many cases are never reported or traced back to the source.
Boca Raton product liability attorneys know that cases like this aren’t especially isolated, though they aren’t always as widely publicized. We’ll likely be seeing more of them in the future as restaurants push the availability of “fresh” meat and produce.
Food-borne illness may seem like a minor inconvenience, but for some, it can result in serious illness, hospitalization, long-term organ damage and even death. In these cases especially, it is imperative to seek legal help.
If you have been injured in an accident, contact the Hollander Law Firm at 888-751-7777 for a free and confidential consultation. There is no fee unless we win.
Chipotle shareholder lawsuit blames executives for failing to prevent widespread illnesses, Aug. 15, 2016, By Kirk Mitchell, The Denver Post
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