Illinois Challenges Jimmy John's Noncompete Job Terms

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By Michael J. Bologna

June 8 — Submarine sandwich chain Jimmy John's illegally imposes noncompete employment terms on its at-will, low-wage workforce, Illinois Attorney General Lisa Madigan has alleged in a lawsuit ( Illinois v. Jimmy John's Enters. LLC, Ill. Cir. Ct., No. 2016 CH 07746, complaint filed 6/8/16 ).

Champaign, Ill.-based Jimmy John's and Jimmy John’s Franchise LLC require all employees to sign noncompete agreements as a condition of employment, Madison said in a complaint filed June 8 in Cook County Circuit Court. Such terms are not only unfair to Jimmy John's thousands of low-wage workers, but such competitive restrictions are illegal and unenforceable under Illinois law, she said.

“Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses,” Madigan said in a statement. “By locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits.”

Overly Broad and Illegal

Madigan's action asserts the particular noncompete language imposed by Jimmy John's is overly broad, illegal and serves no legitimate business interest.

The lawsuit notes that Jimmy John's employees must agree that, “during their employment and for a period of two years thereafter they would play no role, including as a manager, owner, or employee, of any business that earns more than ten percent of its revenue from selling ‘submarine,' ‘hero-type,' ‘deli-style,' ‘pita,' and/or ‘wrapped' or ‘rolled sandwiches.' ”

Such restrictions apply to “any business located within three miles of either the address at which the Store Employee worked or any other Jimmy John's Sandwich Shop anywhere in the country,” the lawsuit states.

The action alleges the fast food company uses the terms to “chill any effort by employees to consider leaving for another employer.”

A spokesman for Jimmy John's declined to comment, saying the company had just learned of the complaint.

Jimmy John's, which touts its “freaky fast” delivery service, operates more than 2,000 corporate and franchise stores in 43 states. Illinois is home to 274 Jimmy John's stores.

To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

For More Information

The complaint is available at http://src.bna.com/fIY.