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AG Madigan aims to take bite out of Jimmy John's non-compete clause

By Mark Powell | Jun 15, 2016

Illinois Attorney General Lisa Madigan has taken aim at another labor dispute, this time against Jimmy John’s over its non-compete agreements.

Madigan’s office alleges that the sandwich maker forces its employees to sign agreements that overly restricts them in future job searches for similar work should they decide to leave the company.

The agreements allegedly bar employees from working at any other sandwich shop while working with the company, as well as two years after their employment ends.

“Under Illinois law, non-compete agreements must be premised on a legitimate business interest and narrowly tailored in terms of time, activity and place,” Eileen Boyce, a spokeswoman for the attorney general’s office, told the Record.

Employees are not allowed to work at any business within two miles of a Jimmy John’s that receives more than 10 percent of their profits from sub sandwiches, according to Madigan. 

There are more than 270 Jimmy John’s stores in Illinois and 2,000 nationwide.

In the Metro East there are nine locations: Alton, Belleville, Collinsville, Edwardsville, Fairview Heights, Glen Carbon, Granite City, O'Fallon  and Wood River.

Managers or owners of shops in O'Fallon and Alton could not be reached for comment. 

Madigan’s office believes that the terms of the non-compete agreement are not narrow enough, in that they provide too many restrictions, especially considering most workers receive low wages.

“Jimmy John’s highly restrictive non-compete agreements went well beyond those terms,” Boyce said.

Jimmy John’s could not be reached for comment, though a representative did tell the Chicago Tribune that the company was disappointed to learn about the lawsuit. It also released a statement regarding the decision.

"The attorney general's office approached us in September 2015 to discuss concerns that it had about the use of non-compete agreements in Jimmy John's stores, and we were nothing but cooperative and transparent throughout the process," the statement reads.

The company argues it stopped using the non-compete agreements in April 2015, but Madigan’s office disputes this, stating the company has yet to implement this change or tell its employees about it.

This isn’t the first time Jimmy John’s has been involved in a labor dispute. In 2014, it was the subject of a class action lawsuit over allegations of improper wages and other violations.

In 2015, an Illinois judge blocked an injunction that would have prevented Jimmy John’s from enforcing non-compete agreements.

The cases were eventually dismissed.

Jimmy John’ssays it is willing to work with the attorney general’s office, and has not enforced the non-compete agreements for hourly employees in months.

“We made clear to the attorney general that we would never enforce a non-compete agreement against any hourly employee that might have signed one,” the company's statement reads. “We offered to have our CEO sign a declaration to that effect.”

The company claims that the non-compete has been removed from all new hire paperwork, and that certain stores have yet to receive a new, updated pre-hire agreement. 

Upon learning of the paperwork issue, Jimmy John’s said it voluntarily informed Madigan’s office and corrected the error.

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