Illinois AG sues Jimmy John's over noncompete pacts; chain 'disappointed'

From the Chicago Tribune:

by Samantha Bomkamp

The Illinois Attorney General's office has filed a lawsuit against Jimmy John's, alleging the company imposes "highly restrictive non-compete agreements on its employees."

The attorney general's office alleges that all employees — from sandwich shop workers to delivery drivers — are required to sign a noncompete agreement as a condition of employment. The agreement bars them from working at another sub shop while being employed at Jimmy John's and for two years after leaving the company, the attorney general's office says.

Specifically, the office claims that the agreement specifies that Jimmy John's employees cannot work at another company that derives at least 10 percent of its sales from selling "submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches" within two miles of a Jimmy John's. Jimmy John's, based in Champaign, has about 270 locations in Illinois and 2,000 nationwide.

"By locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits," attorney general Lisa Madigan said in a statement.

Madigan's office says it wants all noncompete agreements at Jimmy John's to be rescinded and voided. Jimmy John's said it had stopped using such agreements in April 2015, but Madigan said it had not implemented the change or communicated the shift to its employees. Jimmy John's has been under fire for use of noncompete agreements for years, and the chain's practice has been the subject of a failed class-action lawsuit.

Jimmy John's said it was "disappointed" to learn of the lawsuit.

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