Illinois Attorney General Lisa Madigan recently filed a complaint on behalf of the people of the state of Illinois against the popular Illinois-based sandwich shop Jimmy John’s, alleging violations of the Consumer Fraud and Deceptive Practices Act. The claims alleged by the Attorney General stem from Jimmy John’s highly restrictive non-compete agreements. Jimmy John’s currently has all of its employees (including employees of its franchisees) sign non-compete agreements which state that, for a period of two years beginning the date which employment with Jimmy John’s ends, former employees may not be employed by other businesses which make “submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches rolled sandwiches” within two (or three, depending on when the agreement was signed) miles of a Jimmy John’s shop.
Madigan states that these agreements greatly inhibit Jimmy John’s employees from seeking possibly better-paying employment at other sandwich shops. As such, Madigan alleges, Jimmy John’s has their employees locked into low-paying jobs and has no incentive to increase their compensation or benefits. The outcome of this case is yet to be seen. However, it is fairly safe to say that if these agreements are found to be unenforceable in Illinois, many other states will be likely to follow. In addition, Jimmy John’s may decide to stop using the non-compete agreements with low-wage employees nationwide.
This article was written by Tyler Kemper, law clerk.
