According to the law firm press release, Chipotle Mexican Grill, Inc. owns and operates quick-serve Mexican restaurants. The Company operates restaurants throughout the United States.
In 2015, numerous customers fell ill after eating at Chipotle restaurants, exposing the fact that Chipotle’s quality controls were not in compliance with applicable consumer and workplace safety regulations and were inadequate to safeguard consumer and employee health.
Facing a sharp drop-off in sales, Chipotle responded with widely publicized measures that the Company touted as improvements to its food safety protocols. On February 8, 2016, the Company closed all of its restaurants for several hours for an all-staff meeting regarding food safety. In addition, Chipotle hired a new head of food safety who implemented a number of changes to policies at the Company’s restaurants—for example, requiring all employees to wash their hands every half hour, mandating that two employees verified that certain ingredients had been immersed in hot water for at least five seconds to kill germs, and using Pascalization to pre-treat food ingredients. By touting these measures, along with free food promotions and increased advertising, Chipotle aimed to restore customer confidence in the safety of its food.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Chipotle’s purported improvements in its restaurants’ food safety policies were inadequate; (ii) accordingly, Chipotle’s quality controls were still not in compliance with applicable consumer and workplace safety regulations; (iii) in turn, Chipotle’s quality controls remained inadequate to safeguard consumer and employee health; and (iv) as a result of the foregoing, Chipotle’s public statements were materially false and misleading at all relevant times.