In September 2014, a Jimmy John’s employee amended a lawsuit against the company to include an allegation that the company’s non-compete clause is too broad. When an employee signs an employment contract with the company, he or she agrees not to work for a competitor for two years after leaving the company. The non-compete agreement includes any company located within three miles of a Jimmy John’s establishment.
It also includes any company that derives 10 percent or more of its sales from sandwiches. According to the plaintiff’s attorney, this could potentially prevent a student who worked for the company in high school to find work while in college. This is because the restaurant typically operates in college towns within three miles of many college campuses. However, one franchisee said that this non-compete clause is part of a hiring packet that franchisees get from corporate headquarters when bringing a new employee on board.
Furthermore, it was reported that some shop owners decided to pull the agreement after it gained publicity. It was also not clear if the company had actually enforced the agreement, but a former Subway employee was blocked from starting a new job in 2009 due to a similar non-compete clause. Depending on the state in which the non-compete clause was signed, it may be possible for employees to fight such a clause. Employers generally cannot enforce non-compete clauses for employees who lack access to sensitive or proprietary information.
State law may override the language of non-compete agreements that employees are asked to sign when they are hired. Such provisions are usually required to be limited in scope and duration, and an employment law attorney can provide guidance in this regard.
Source: The Huffington Post, “Jimmy John’s Makes Low-Wage Workers Sign ‘Oppressive’ Noncompete Agreements“, Dave Jamieson , October 15, 2014