Are Chipotle’s problems over? Not yet. Chipotle’s stock price plummeted after a series of foodborne illness outbreaks linked to its stores. Chipotle continues to face new lawsuits related to its food safety problems. This one comes from its investors: Chipotle shareholders have alleged that the fast food chain failed to disclose that “its quality controls were inadequate to safeguard consumer and employee health.” Since the suit was filed in January 2016, numerous additional plaintiffs have joined in and the court has appointed a lead plaintiff and plaintiffs’ counsel. Chipotle has not answered the claims yet.
This latest suit comes on the heels of several other civil cases filed by Chipotle customers who became ill after eating there:
- A class of diners who contracted the norovirus after eating at the Simi Valley, California location sued Chipotle. This outbreak allegedly sickened 234 customers.
- A Minnesota woman who contracted salmonella and was hospitalized twice after eating at Chipotle sued the restaurant in September 2015.
- A mother sued Chipotle for the “days of illness” that her 16-year-old son experienced when he contracted E.coli after eating at Chipotle.
Customers and investors aren’t the only ones seeking damages. In January 2016, the U.S. Attorney’s Office for the Central District of California launched a criminal investigation into Chipotle’s alleged “cover-up” of the Simi Valley outbreak.
Chipotle is fighting back. Last winter it shut down all of its stores nationwide for a staff meeting about food safety. It vowed to adjust its cooking and quality control processes to prevent foodborne illness. Chipotle claims that its new safety measures are working—spokesman Chris Arnold said there have been no new incidents reported for months and Chipotle is currently serving “1 million customers a day in its restaurants nationwide without incident.”
But it may be too little, too late. Many believe that Chipotle has lost some customers for good despite its efforts to win them back with discounts and coupons. Moe’s Southwest Grill recently took Chipotle’s place as the top Mexican food chain in the United States. On June 15, 2016, Chipotle’s stock was trading at a three year low, down almost 50% from its peak in the last year.