Dawn Geske Jun. 29, 2016, 3:30pm

CHICAGO – The attorney general for Illinois has filed a lawsuit against fast food franchisor Jimmy John’s and several Jimmy John’s franchisees operating in Illinois, over its non-compete agreements.

The suit, which was filed June 8 by Illinois Attorney General Lisa Madigan, claims the non-compete agreements, which Jimmy John’s requires delivery drivers and sandwich makers to sign, are unlawful for at-will, low-wage employees.

The non-compete agreement prohibits employees from finding employment at any business within 2 miles of a Jimmy John’s that earns more than 10 percent of its revenue from selling submarines, deli-style, pita, or wrapped or rolled sandwiches. The restrictions of the agreement are in place during the employee’s employment with Jimmy John’s and for two years after they leave.

Sally Scott, partner at Franczek Radelet in Chicago, told the Cook County Record non-compete clauses are designed to protect legitimate business interests.

"You don’t want an employee to take what makes you unique and go to a competitor and say here I have the recipe for McDonald's French fries or Coca-Cola, and pay me money and I’ll give it to you, or hire me and I’ll give it to you," she said.

In this case, however, Jimmy John's could be hard-pressed to explain what the legitimate interest is underlying their non-compete agreements, Scott said.

"When you’re talking about delivery drivers, sandwich makers, cashiers, you’re not going to have that kind of legitimate business interest at stake," she said.

In her lawsuit, Madigan claimed the non-compete agreements were oppressive and unethical as they prevent low-wage workers from seeking better-paying jobs elsewhere, essentially locking them into the position they are in. She also stated that this prevents companies from increasing their wages and benefits, as well as limiting the number of employment options available to a worker to seek higher wages, advancement or negotiate wages.

The use of non-compete agreements, Madigan said, has an effect on trade and commerce in Illinois, and limits the number of workers available to businesses looking to hire.

“If there is a legitimate protectable interest, they’re enforceable," Scott said. "You have to establish you have this legitimate business interest you're protecting. When you apply it to something like a delivery driver, there’s no protectable interest there. There’s nothing unique about Jimmy John’s delivery drivers versus another company’s delivery driver."

Non-compete agreements are common with top level management, which Scott said can extend to others in a company that have privileged knowledge about a business.

“It doesn’t have to be senior management, but it has to be someone that has some confidential information that the company can legitimately protect," Scott said. "It could be a top scientist. It may be top level management or it could be someone in charge of production who knows confidential information.”

Really, Scott, added, “any employee that has some knowledge that they acquired at their employer, that the employer has a legitimate interest to protect.”

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Organizations in this Story

Illinois Attorney General
500 S 2nd St
Springfield, IL 62701

Franczek Radelet P.C.
300 S Wacker Dr
Chicago, IL 60606

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