No one has ever accused Chipotle of carrying “authentic” Mexican food, but some of its employees may fit that description to a tee, judging by the company’s recent travails. 

The popular burrito chain is in the midst of a government crackdown on its alleged employment of illegal immigrants. An investigation by the U.S. Immigration and Customs Enforcement Agency (ICE) discovered that employees at over 50 restaurants turned in unverifiable I-9 forms -- also known as “Employment Eligibility Verification forms” -- which companies provide to the government to ensure that a worker is eligible to work in the U.S. 

The investigation led to the firings of hundreds of workers at a Chipotle in Minnesota, and some reports say that the dragnet has expanded to restaurants in Washington, DC, and Virginia. 

Warning to shareholders 

According to a Reuters report, Chipotle warned investors as early as a year ago that it might be subject to a federal crackdown. 

“We have been subject to audits by immigration authorities from time to time,” the company said in its 2009 annual reported, filed last February.

“[A]t the time of that disclosure, we had not been notified by DHS or any other government agency that any of our worker documents were suspect,” Chipotle spokesman Chris Arnold said in an email statement to Reuters. 

“We had no notice of any issues with our employees until we received a Notice of Suspect Documents from Immigration and Customs Enforcement in November 2010.” 

Class action by employees 

Two of the terminated employees have filed a class action lawsuit alleging that Chipotle failed to pay them back wages in a timely fashion. 

Tanya Cortes and Alejandro Juárez allege in their suit that Chipotle broke Minnesota state law when it failed to  give them all earned compensation at the time they were fired. 

Arnold told the Pioneer Press that the suit’s allegations are without merit. 

“We have paid every employee everything that they were owed including wages, accrued vacation and bonuses,” he said in an email to the paper. 

Consumer backlash

The issue is also causing a backlash among some consumers and threatening to create a public relations nightmare for Chipotle, which prides itself on providing “food with integrity.” After the Minnesota terminations were made public, eight protestors chained themselves to the door of the restaurant, and were eventually charged with trespassing after they refused to leave. Several of the protestors were carrying signs that said, “Chipotle: You cannot sell Mexican food and then sell out Mexican workers.” 

Indeed, Arnold -- who concedes he is juggling a lot of plates at the moment -- sounded melancholy when addressing the issue recently in an interview with The Wall Street Journal

“Ours is a culture that is built on recognizing top-performing employees and developing them into future leaders, so this is a particularly troubling situation for us because of the impact this has on future generations of leaders and managers,” he said. “We'd rather keep all these people but under the law we can't do that.”