The Fine Print in Employment Contracts: Jimmy John’s Wants Workers to Fork Over a Promise Not to Compete
The Fine Print in Employment Contracts:
Jimmy John’s Wants Workers to Fork Over a Promise Not to Compete
Dave Jamieson at The Huffington Post explains how Jimmy John’s corporate standard hiring packet contract contains a “non-compete” provision that franchisees may use and require employees to sign.
Usually these types of restrictive clauses are found in contracts for higher up employees or individuals that have access to trade secrets or special information or are identified with a particular company such that a business could be damaged if the employee switches to another competitor.
The promise not to compete, or a limit on one’s mobility in the labor market, is usually a bargained over point, where theoretically one is compensated for the restriction on one’s future employment choices, not something appropriate for form contract used for sandwich makers.
It’s hard to imagine how an employee making sandwiches could or should be covered by a noncompete clause. It’s even worse because of the breadth of the clause used in the agreement — which lasts for two years after the employment terminates and applies within three miles of any Jimmy John’s, a company with more than 2000 locations in the U.S.
The contract provision states:
Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop.
There is a class action lawsuit challenging these provisions underway. The story, with a link to the full agreement, is here.