Not So Fast Jimmy John’s!
To this day, I can remember the excitement I felt while filling out paperwork for my first job during my senior year of high school. Even though I was only going to be a minimum wage employee, who worked a meager twenty hours a week seating guests at the local seafood restaurant, I finally had a job that didn’t involve a lemonade stand. This was my first real job.
In October 2014, a well-known sandwich chain added a few extra pages for their employees to sign at franchisee-owned locations across the United States. The pages included a non-compete agreement stating that all Jimmy John’s employees cannot work at a competing sandwich shop for a period of two years following their departure. To be more specific, a “competing sandwich shop” is one that earns nearly 10% or more of its revenue from sandwiches, which can include independent and local chains, and is located within three miles of any Jimmy John’s location.
As one might imagine, many have found this to be quite unreasonable.
According to Chain Store Guide’s Chain Restaurant Operators database, there are over 2,100 Jimmy John’s locations spanning across 40+ states. While 2,100 locations doesn’t sound like it would affect an employee much, when an employee signs a Jimmy John’s non-compete agreement, they are essentially prohibited from working at one of the nearly 43,700 Subway locations, Quiznos’ 2,100 stores, Jersey Mike’s nearly 850 locations, or even one of Which Wich’s 320+ stores. The Huffington Post writes that this non-compete is “oppressive” and is “effectively blacklisting [former employees] from whole cities for a period of time.”
Non-compete agreements are nothing new to the business world, but aren’t they usually signed by high-ranking executives or employees who have access to proprietary information or trade secrets? (You know, ones like the Bush’s Baked Beans secret family recipe!)
Kathleen Chavez, a lawyer involved with a class action suit against the company, hit the nail on the head by stating, “When you’re making eight bucks an hour, going in and hiring an attorney and paying filing fees to find out whether you can work at Subway is just not practical.” Many politicians agree.
According to Eater.com, Senators Chris Murphy (CT) and Al Franken (MN) “plan to introduce a bill that would ban businesses from including non-compete clauses in contracts with low-wage employees.” The article continues to state, “Those who earn less than $15 an hour, $31,200 annually, or must work a minimum wage job do not have to agree to contracts that prevent them from working at a similar business.” Letters have been written to the Federal Trade Commission, by 35 House Democrats, asking for the FTC to “look into the issue of non-competes for low wage workers.”
In due time, we will see whether or not non-compete agreements are here to stay for minimum wage employees in the service industry. So far, Jimmy John’s franchisees have been able to keep delivering those non-compete agreements by surviving recent court appearances. There’s a clear sentiment that hopefully one day Jimmy John’s will head freakishly fast away from non-compete agreements and embrace their employees with open arms and an open job market.