Jimmy John’s, the sandwich chain known for marketing its “freaky fast” delivery of food, recently found itself subject to national media attention and, now, congressional scrutiny over alleged noncompete agreements it requires its employees to sign.
In a proposed class action wage dispute filed against Jimmy John’s in July, the employee-plaintiffs recently included with an amended complaint what purports to be the company’s noncompete agreement. According to that noncompete the plaintiffs submitted, employees cannot work at any business within 3 miles of a Jimmy John’s location that earns more than 10% of its revenue from selling “submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches” for up to two years after their termination. And rather than being limited to executives or key position-holders, the noncompete apparently applies to the entire workforce.
Once the agreement was publicized in the national media last week, questions arose as to the reasonableness of its scope and whether it is reasonably tailored to protect a legitimate business interest. Those initial questions and publicity led this week to as many as 37 members of the U.S. House of Representatives urging the Department of Labor and Federal Trade Commission to investigate the situation.
Regardless of how the issue and the underlying litigation are resolved, the situation serves as a potent reminder to employers that they must critically evaluate the need for and the scope of noncompete agreements.
Brunner v. Jimmy John’s Enterprises, Inc., Case No. 1:14-cv-05509 (N.D. Ill.)