When Chipotle Mexican Grill Inc. fired store manager Jeanette Ortiz, accusing her of stealing $626 in cash from the safe, it could never have expected its minimal theft loss to balloon into a nearly $8 million jury verdict against if for wrongful termination of Ortiz. Even worse, an assessment of potential punitive damages against Chipotle in that case is still pending. Nevertheless, according to an article in the Fresno Bee, jurors awarded Ortiz nearly $8 million after finding that Chipotle had wrongfully terminated her. According to Ortiz, she was innocent of theft and was set up in retaliation for filing a claim for workers’ compensation benefits due to a work-related wrist injury. The article reported Chipotle had video of the theft but refused to show it to Ortiz and eventually taped over the evidence. Apparently, Chipotle failed to preserve text messages and other written notes about the firing as well. Although the article does not elaborate, it is quite likely the jury reached an adverse inference that the missing evidence would have been helpful to Ortiz in proving her case.
Savvy employer takeaways: While it is impossible to know for sure how much weight the missing evidence had on the jury’s decision, employers are wise to preserve all evidence relating to employee misconduct to avoid even an appearance of wrongdoing. As in politics, although the original offense is bad enough, the ensuing cover-up is always worse.
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The U.S. Court of Appeals for the Sixth Circuit sided with a church operating the Lord’s Buffet and against the Department of Labor (“DOL”) in a case testing the reach of the Fair Labor Standards Act (“FLSA”). In Acosta v. Cathedral Buffet, Inc., the appellate court reversed a trial court ruling and held that volunteers who staffed a church-operated buffet are not employees and the Grace Cathedral Church did not run afoul of the FLSA by failing to pay the volunteers minimum wage. The DOL claimed the church and its televangelist pastor illegally used unpaid labor by staffing its buffet with volunteers from the congregation. In this case, the church operated the buffet restaurant for a religious purpose: to allow church members to proselytize to patrons. Its operations relied heavily on church volunteers who worked alongside paid employees performing the same work. While the work performed was comparable to that of an employee, the Sixth Circuit held the DOL overstepped the bounds of the FLSA by applying it to the volunteer workforce. In part, the Court’s decision relied on a determination that the volunteers had no expectation of payment and were not economically reliant on the work of the church. 
In Malee v. Anthony & Frank Ditomaso, Inc., the Court served a surprise to a shareholder of a corporation that owned a restaurant, who sought to be dismissed from a FLSA case brought by employees of the restaurant. The shareholder alleged he did not participate in the business on a day-to-day basis and, therefore, was not an “employer” within the meaning of the FLSA. The Court refused to dismiss the claims, finding that the shareholder’s attendance at staff meetings, and advice on operating the business created a triable issue of fact as to whether the shareholder was, in fact, an employer within the meaning of the FLSA.
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