Marketing

Chipotle to pay $6.5M to settle class-action suit over non-GMO claims

The fast-casual chain admits no wrongdoing in the case, which ends three years of litigation.
Photograph courtesy of Chipotle Mexican Grill

Chipotle Mexican Grill will pay $6.5 million to settle a class-action suit that accused the fast casual of falsely advertising that its food is free of genetically modified ingredients, according to documents filed this week in California federal court.

The settlement, in which Chipotle admits no wrongdoing, ends three years of litigation against the 2,500-unit chain. It entitles anyone who purchased food from any Chipotle unit in the U.S. from April 27, 2015, until June 30, 2016, to $2 back on each qualifying purchase, with the ability to claim up to five qualifying purchases without documentation. Those with proof of purchase can be awarded up to $20 for 10 qualifying purchases during the period, with a $30 per-household cap, according to the settlement.

A Chipotle representative did not immediately respond to RB’s request to comment on the settlement.

In 2015, Chipotle became the first major restaurant chain to announce it would start serving food entirely free of genetically engineered ingredients, after becoming the first national restaurant company to disclose GMO ingredients two years earlier. At the time, Chipotle said most of the genetically modified ingredients in its food were found in soybean oil and tortillas.

But in the class-action suit, the plaintiffs allege that Chipotle’s food products “may have been sourced from livestock that consumed GMO animal feed.”

The $6.5 million settlement could serve as a point of caution for other brands as they consider their marketing messages.

For its part, Chipotle said its GMO-related marketing campaigns are “true, are substantiated through science, and are therefore not deceptive or misleading as a matter of law,” according to the court filing.

Earlier this week, Chipotle became the first restaurant chain to be targeted under New York City’s Fair Workweek Law, with the city accusing the chain of violating its predictable scheduling rule.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Despite their complaints, customers keep flocking to Chipotle

The Bottom Line: The chain continued to be a juggernaut last quarter, with strong sales and traffic growth, despite frequent social media complaints about shrinkflation or other challenges.

Operations

Hitting resistance elsewhere, ghost kitchens and virtual concepts find a happy home in family dining

Reality Check: Old-guard chains are finding the alternative operations to be persistently effective side hustles.

Financing

The Tijuana Flats bankruptcy highlights the dangers of menu miscues

The Bottom Line: The fast-casual chain’s problems following new menu debuts in 2021 and 2022 show that adding new items isn’t always the right idea.

Trending

More from our partners