Chipotle cuts losses, settles case with ex-worker rather than face big dollar damages

Chipotle Mexican Grill Inc. on Monday reached a confidential settlement with a former employee, rather than face punitive damages for wrongfully firing her in January 2015 from the Shaw Avenue restaurant across from Fresno State.

A Fresno Superior Court jury last Thursday awarded Jeanette Ortiz $7.9 million in her wrongful termination civil case for loss of past and future wages and emotional distress against the fast-foot giant, a company that is worth about $1.3 billion.

The same jury returned to court Monday to determine punitive damages, which are awarded to deter future reprehensible conduct. By law, the amount of punitive damages could be up to nines times to $7.9 million award.

Instead of letting the jury decide punitive damages, Chipotle's lawyers settled with Ortiz and her lawyers, Warren Paboojian, Adam Stirrup and Jason Bell, for an undisclosed sum.

Settlements are typically reached to avoid an appeal, which could tie up a case for years. And, in this case, that is exactly how it was decided.

In court, Paboojian said, the settlement includes court costs, attorneys fees and an amount that resolves Ortiz's complaint against Chipotle.

Ortiz told Judge Jeffrey Hamilton that she agreed with the settlement.

Outside court, Paboojian said that because of the settlement agreement, he was prohibited from saying how much Ortiz will receive. But he said, "They vindicated my client."

Paboojian also said the initial $7.9 million award "sends a message to corporate America that you need to treat your employees fairly and honestly."

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On Monday, May 14, 2018, Fresno attorney Warren Paboojian emerges from a Fresno courtroom with his client, Jeanette Ortiz, and co-counsel Adam Stirrup after reaching a confidential settlement with Chipotle Mexican Grill. A Fresno Superior court jury on Thursday, May 10, 2018, ordered Chipotle to pay $7.9 million in damages to Ortiz for wrongfully firing her in January 2015. On Monday, May 14, 2018, the fast-food giant reached a confidential settlement with Ortiz, rather than face punitive damages. plopez@fresnobee.com PABLO LOPEZ

Chipotle's lawyers declined to comment.

During the trial, both sides agreed Ortiz, 42, was a loyal, hardworking general manager who received outstanding performance reviews during her 14 years with Chipotle.

But in January 2015, Ortiz was accused of stealing $626 in cash from the restaurant's safe and was fired, said Los Angeles attorney Robert Hinckley, who represented Chipotle. Hinckley said there was video evidence to prove Ortiz's theft.

But when Ortiz denied stealing the money and asked to see the video evidence, her bosses at Chipotle declined. Instead, the company destroyed the video evidence, Paboojian told the jury.

In its verdict, the jury of four men and eight women ruled that Oritz was not a thief, but was a victim of a scheme to fire and defame her for filing a worker's compensation claim for a job-related injury to her wrist caused by carpal tunnel syndrome.

The jury deliberated about four hours before reaching its verdict.

The case went to trial because Chipotle offered to give Ortiz, 42, only $1,000 to settle her civil complaint. During the trial, Paboojian asked the jury to award Ortiz least $10 million.

In closing arguments, Paboojian attacked the credibility of Chipotle's upper management, including Ben Castillo, who oversees about 70 restaurants from Fresno to the coast to Southern California, and Ortiz's immediate supervisor, Janelle Schrader.

Paboojian said the theft claim was ridiculous because Ortiz was making $70,000 a year as a general manager and company officials had talked about promoting her to a position that would have paid her at least $100,000, he said.

That all changed, Paboojian said, when Ortiz filed a worker's compensation claim in December 2014. Because of her dedication, she continued to work with her injured wrist until Jan. 18, 2015, when she went on medical leave. While on leave, upper management fired her without showing her the video evidence, Paboojian said. He called the move "evil," "indecent" and un-American.

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For years, Jeanette Ortiz managed this Chipotle restaurant at Shaw and Cedar avenues, across from Fresno State, before she was fired in January 2015. On Thursday, May 10, 2018, a Superior Court jury ordered Chipotle Mexican Grill, Inc. to pay Ortiz nearly $8 million for wrongfully terminating her and ruining her reputation. plopez@fresnobee.com PABLO LOPEZ

Hinckley, however, told the jury Chipotle upper management had no malice toward Ortiz, but felt betrayed because the corporation had supported her through four pregnancies and four worker's compensation claims. "She was well-liked. She was a valued employee," Hinckley told the jury. "But she violated that trust by taking the money."

He said Schrader, Castillo and three others looked at the video and determined that Ortiz stole the money on Dec. 29, 2014. That was different from the testimony of a key witness in the trial, former Chipotle assistant manager Mike Hunsaker, who worked with Ortiz and helped her count the daily receipts. He testified that he last saw the $636 in cash, which was in an envelope, on Dec. 30, 2014, Paboojian said.

After Monday's settlement was reached, Paboojian, Stirrup and Allan Claybon, a lawyer for Chipotle, talked to jurors privately. Afterward, Paboojian, Ortiz and Stirrup thanked jurors for their service.

In the end, Paboojian said, jurors told him that they didn't like that fact that Chipotle didn't have a corporate policy on how to conduct investigations or retain video evidence. He said jurors also didn't like the way Chipotle upper management treated Ortiz.

"They are not just work things. They are human beings," Paboojian said of Chipotle workers. "They need to be treated fairly."

Pablo Lopez: 559-441-6434, @beecourts
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