Moving a HQ Can Be Legal and Logistical Adventure
Corporations pull up stakes and move their headquarters all the time for many different reasons. The latest case in point in Denver appears to be a local’s favorite: Chipolte. After branching out nation-wide for 25 years, the burrito chain announced in May that it was moving from Denver to Newport Beach, CA. Chipolte’s founder Steve Ells started his company out in a former Dolly Madison building, located at 1644 E. Evens Ave. Originally, it looked like the company would relocate to a high rise in downtown Denver, but very shortly after that news broke it was learned that Chipolte would be relocating to California, which just so happens to be new CEO Brian Niccol’s (former CEO of Taco Bell) home turf.
“We’ll always be proud of our Denver roots where we opened our first restaurant 25 years ago,” Brian Niccol said in a statement. “The consolidation of offices and the move to California will help us drive sustainable growth while continuing to position us well in the competition for top talent.”1
In this blog, we’ll take a look at some of the legal and logistical implications of moving Chipolte.
What Will Relocating Chipolte from Colorado to California Entail?
The following is a list of corporate considerations and business decisions that will impact the burrito franchise’s move:2
- Chipolte will close its offices in Denver and New York, and relocate to Newport Beach, California, which will have a whole new set of tax implications as well as require a business license, if they don’t already have one for that city.
- Nearly 400 employees will be impacted. The company is working out who will be offered relocation and retention packages, and who will be given severance, pink slips, or forced early retirements.
- Other food chains with headquarters in the area include Taco Bell and Del Taco, which can make it a very favorable area to recruit top talent from.
- The company plans to relocate most of its corporate functions to Newport, such as operations, business development, communications, human resources, marketing, finance, supply chain, food safety, and technology.
- Critics say the move will tarnish the burrito makers long-earned Colorado reputation by moving to California, which they claim is apathetic to brand favoritism because the state is filled with companies.
How Moving a Company or Corporate Headquarters Impacts the Business from a Legal Standpoint
When a company relocates its headquarters to a different state there are many impacts to consider, such as:
- The distance required to transport equipment, office furniture, inventory, supplies, etc.
- The number of employees that will be offered relocation assistance and the amount of money it will cost the company.
- The timeline for the move and whether it’s realistic.
- Giving employees proper notification and consultation about the move.
- Was there a mobility clause in the employment contracts, and is it adequate for the proposed relocation?
- Are reasonable measures being taken to accommodate disabled employees with their move?
Contact a Denver Business Attorney at Lohf Shaiman Jacob
Is your corporation or small business looking to relocate? If so, let our Denver Business & Employment Law Lawyers at Lohf Shaiman Jacobs Hyman & Feiger help you assess your employment contracts and any legal ramifications a relocation will have on your company. To learn how we can best serve you, call us at (303) 974-4411 or send us an email using the contact form on this page.
1“Chipolte to Close Denver, New York Offices and Move Headquarters to Southern California” published in CNBC, May 2018.
2“Eight Ways Chipolte Will Change With the Move to California” published in Westword, May 2018.