RESOLVED, that shareholders of Chipotle Mexican Grill (“Chipotle”) ask the board of directors to strengthen board oversight of workforce equity issues by assigning responsibility for oversight to an existing or new board committee. For purposes of this proposal, “workforce equity issues” include racial and gender pay equity, employment discrimination, diversity and inclusion and the relationship between compensation and benefits provided to senior executives and those provided to the rest of the workforce.

Supporting Statement: The COVID-19 pandemic and movement for racial justice have intensified the already widespread public debate about workplace equity concerns. Women and nonwhite workers have lost jobs at higher rates than white workers since the pandemic began. Black and Latinx workers are overrepresented among essential workers, exposing them to greater risk. Workers have protested to demand increased hazard pay, paid sick leave and safe working conditions.

The unavailability of paid sick days for workers during the pandemic has been a subject of substantial attention from the media and policy makers.[1] The Families First Coronavirus Response Act provided up to two weeks of paid sick leave to employees sick with COVID-19 or quarantined due to exposure, and expanded family and medical leave. Some states and cities have adopted or updated paid sick leave laws (in some cases limited to COVID-19 and/or certain groups of employees) since the pandemic began.

While Chipotle has at times positioned itself as a leader on workforce issues, reporting indicates that significant risks remain. A 2020 report identified structural issues that heighten the risk of food-borne illness outbreaks amongst frontline workers and customers.[2] The company has also settled claims regarding violations of paid sick leave laws as recently as 2020.[3] Some of the outbreaks tied to food-borne illnesses between 2015 and 2018 were traced back to related issues like pressuring crew members to work while sick.[4] During the course of the pandemic, workers have staged walk outs[5] and filed complaints regarding workplace hazards.[6] Our company’s frontline workers are ~60% Black and Latinx while the corporate staff is 16.2% Black and Latinx raising concerns about disparate impact of policies covering those workers.

None of Chipotle’s board committees are currently delegated responsibility for workforce equity issues. We believe that more robust board-level oversight of such issues would improve management, mitigate related financial and reputational risks and strengthen the company’s leadership in this area. Our proposal draws on a recent article by former Delaware Chief Justice Leo Strine Jr. advocating that the board’s compensation committee “expand its perspective and become a committee focused on the company’s workforce as a whole” to address “the increased demand that boards give more focus to how the company treats its workforce.”[7] Although we do not specifically ask that the compensation committee be tasked with overseeing workforce equity issues, we believe those matters could dovetail with the committee’s existing mandates.

[1] See, e.g., https://www.cnn.com/2020/04/16/business/grocery-store-workers-retail-paid-sick-leave/index.html; https://www.theatlantic.com/health/archive/2020/03/does-walmart-provide-paid-sick-leave/608779/; https://www.washingtonpost.com/business/2020/03/10/walmart-apple-olive-garden-are-among-major-employers-updating-sick-leave-policies-coronavirus-cases-spread/; https://www.nytimes.com/2020/03/14/opinion/sunday/coronavirus-paid-sick-leave.html

[2] https://myfastfoodstory.org/wp-content/uploads/2020/02/UnsavoryReport_Digital04.pdf

[3] https://www.mass.gov/news/ag-healey-chipotle-reach-nearly-2-million-settlement-to-resolve-child-labor-and-earned-sick

[4] https://myfastfoodstory.org/wp-content/uploads/2020/02/UnsavoryReport_Digital04.pdf

[5] https://gothamist.com/news/chipotle-workers-demand-company-comply-sick-leave-laws-amid-covid-19-outbreak

[6] https://patch.com/new-york/midtown-nyc/nyc-chipotle-employees-protest-unsafe-working-conditions

[7] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3619273

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