Jimmy John’s settles, gets rid of Illinois noncompete agreements,

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By Joy Waltemath

By Pamela Wolf, J.D.

Under a settlement agreement, Jimmy John’s will roll back the highly restrictive noncompete agreements that have been imposed on low-wage sandwich shop employees and delivery drivers in Illinois, according to a release by the Attorney General’s Office (OAG). The franchisor will also give $100,000 to the OAG to use toward education and outreach to raise public awareness about the legal standards for enforceability of noncompete agreements and promote employer best practices.

Between its franchise and corporate-owned locations, Jimmy John’s operates nearly 300 sandwich shops in Illinois. In June, the corporate entity agreed to inform franchisees in New York that the attorney general in that state had concluded the noncompetition agreements were unlawful and should be voided.

Similarly, Attorney General Lisa Madigan’s settlement agreement with Jimmy John’s Enterprises LLC and Jimmy John’s Franchise LLC requires the company to notify all current and former employees in Illinois that their noncompetition agreements are unenforceable and confirm that Jimmy John’s does not intend to enforce them. The franchisor will also notify all franchisees in Illinois of the same and ask them to rescind any noncompetes they used based on the model agreement provided by Jimmy John’s corporation. In addition, Jimmy John’s will implement a process to remove all noncompetes from “new hire” packets and stores, and use noncompetes in compliance with Illinois law moving forward.

Madigan filed her lawsuit in June 2016. The noncompete agreements that Jimmy John’s used in Illinois restricted employees during their employment and for two years afterward from working in any other business that earns more than 10 percent of its revenue from selling “submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches.” The work restriction purported to apply to any sandwich business located within three miles of any Jimmy John’s Sandwich Shop in the country. A later version of the noncompete agreement modified the geographic limitation to two miles around any Jimmy John’s Sandwich Shop in the country.

“This settlement helps ensure Illinois’ workers have freedom to change jobs in order to seek better wages, further their careers, and improve their lives,” Madigan said. “Workers in Jimmy John’s sandwich shops should know they are not subject to these unfair and unenforceable agreements.”

Source:: Employment Law Daily Newsfeed


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