News of Jimmy John's non-compete clauses first came to light in 2014. News articles questioned the purpose of a non-compete clause for restaurant employees. An article in the New York Times saw it as an example of employers taking advantage of low-wage, hourly employees. However, at the time, there was no evidence that the sandwich company had ever tried to enforce the clause.
This month, Illinois Attorney General Lisa Madigan has announced that the state is suing Jimmy John's over the restrictive clause. Under employment agreements with the sandwich shop, employees are prevented from working for any other business that sells, “submarine, hero-type, deli-type, pita, and/or wrapped or rolled sandwiches,” for two years. This applies to any sandwich business which derives at least 10 percent of revenue from sandwich sales, located anywhere within 2 or 3 miles of a Jimmy John's Sandwich Shop.
Jimmy John's is a franchised sandwich restaurant chain specializing in fast delivery. The company was started more than 30 years ago in a garage in Charleston, Illinois. Within 10 years, the sandwich shop was opened up to franchising. Headquartered in Champaign, Illinois, today, there are more than 2,500 Jimmy John's locations across the country, with almost 300 shops in Illinois alone.
In response, Jimmy John's issued a statement of disappointment when learning of the lawsuit. “The Attorney General's Office approached us in September 2015 to discuss concerns that it had about the use of non-compete agreements in Jimmy John's stores,” reads the statement, “and we were nothing but cooperative and transparent throughout the process.”
The company also claims that they communicated to the AG that they would never enforce a non-compete agreement against any hourly employee. Additionally, an April 2015 ruling dismissing a federal claim against Jimmy John's on the grounds that the non-compete clauses were not at risk of being enforced.
Jimmy John's claims the non-compete language was removed from new-hire paperwork, but because of an administrative error, some stores continued to use the older paperwork that included the non-compete language. The company claims that they immediately corrected the error and informed the AG of the change.
According to the complaint filed by the AG, the agreement is illegal and unenforceable under Illinois law. The complaint alleges Jimmy John's has no legitimate business interest in restricting the employment opportunities of the company's hourly restaurant and delivery employees. The lawsuit is seeking a judgment to that effect, including possible civil penalties.
“Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses,” said AG Madigan in a press release. “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.”
If you are not being treated fairly by your employer, or if your employer is trying to restrict your rights, you should speak with an experienced attorney who understands Illinois employment law. At Benassi & Benassi, we are committed to getting our clients the justice they deserve and get equal pay and equal treatment under the law.