Are Jimmy John’s non-compete clauses so absurdly restrictive that they’re actually illegal? House Democrats are looking into it, as they plan to request a federal investigation from the Labor Department and Federal Trade Commission into the punitive measures of the fast-food sandwich chain’s employee contracts, the Huffington Post reports.
Jimmy John’s requires all new employees to sign an employee agreement which includes a harsh non-compete clause, the Huffington Post reported last week. These clauses are normally reserved for upper tier-employees bearing corporate knowledge and company secrets but have become increasingly common for low-wage workers in recent years.
The employee agreement, obtained by The Huffington Post’s Dave Jamieson, revealed the extent of the draconian measure, which prevents employees from working for competitors for up to two years. What makes the agreement truly absurd is how the company defines a competitor: any business which makes at least 10 percent of their profit from sandwiches, pitas, or wraps, and is within 3 miles of a Jimmy John’s franchise.
To give an idea of how restrictive that rule is, look at the map of where former employees are prohibited from working in Chicago and the surrounding suburbs, created by of SigActs.com.
You can explore more in SigActs’ insightful interactive map here.
The letter, penned by Rep. Joe Crowley of New York, vice chair of the House Democratic Caucus, and Rep. Linda of California, both Democrats, came after Jamieson broke the story of the agreements and calls for the Department of Labor to investigate the overuse of non-compete clauses, which are “anti-competitive and intimidating.”
From the Huffington Post:
“There is no justifiable business interest in imposing such a restriction on restaurant employees that are not privy to any of the company’s proprietary information,” reads the letter, a copy of which was provided to HuffPost by Crowley’s office. “Furthermore, we believe this practice can intimidate working individuals, many of whom are struggling to support themselves and their families while earning barely above the minimum wage.”
Though Jimmy Johns’ has never enforced their non-compete clause, other restaurant chains and employers have. In 2013, Subway pursued legal action against a woman who tried to get a job with an employee after the chain let her go because of an illness. As the New York Times reports, the clauses are being used simply to harass workers — workers who pose no threat to the corporations they work for and simply want to earn a living.