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Non compete clauses for sandwich makers, could Mickey D be next?


CMRivdog
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Just another reason for me to avoid the "super speedy" guys. Here is the gist. Jimmy John's is making their employees sign a two year non compete clause that essentially forbids them to work at any other establishment that sells sandwiches within three miles of any of their locations.

Jimmy John's Noncompete Agreements - Business Insider

First of all I doubt if this is enforceable, but since most of their employees probably make close to minimum wage who can afford to contest it?

I've worked at companies that had non compete clauses that forbid working for competitors within a certain distance or market area. I also thought they were stupid for lower level employees. (What secrets did I know that our competition hadn't already figured out)

The problem is this seems to be a growing concern. it used to be only for managers and key employees now agreements are being used in respect to everything from camp counselors to hair stylists.

http://www.nytimes.com/2014/06/09/business/noncompete-clauses-increasingly-pop-up-in-array-of-jobs.html?smid=pl-share&_r=0

It just seems another way for employers to place restrictions on employees and keep wages low.

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Just another reason for me to avoid the "super speedy" guys. Here is the gist. Jimmy John's is making their employees sign a two year non compete clause that essentially forbids them to work at any other establishment that sells sandwiches within three miles of any of their locations.

Jimmy John's Noncompete Agreements - Business Insider

First of all I doubt if this is enforceable, but since most of their employees probably make close to minimum wage who can afford to contest it?

I've worked at companies that had non compete clauses that forbid working for competitors within a certain distance or market area. I also thought they were stupid for lower level employees. (What secrets did I know that our competition hadn't already figured out)

The problem is this seems to be a growing concern. it used to be only for managers and key employees now agreements are being used in respect to everything from camp counselors to hair stylists.

http://www.nytimes.com/2014/06/09/business/noncompete-clauses-increasingly-pop-up-in-array-of-jobs.html?smid=pl-share&_r=0

It just seems another way for employers to place restrictions on employees and keep wages low.

According to his ads, this is one Fieger should take up....

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Jimmy John's was also just recently hit with forcing employees to work unpaid off the clock to avoid overtime.

Jimmy John's Faces Overtime Lawsuit | Overtime Pay Laws

A couple of employees, Karolis Kubelskas and Emily Brunner, from two separate Jimmy John’s locations in Illinois claim the sandwich food chain has a corporate policy requiring hourly employees to work “off-the-clock” and of denying both minimum wage and overtime pay.

The lawsuit also claims hourly employees are frequently given too much work to complete in the time they are scheduled and managers require them to clock-out at the end of their shift, and then finish the assigned work. And the company’s policies allegedly encourage this practice of “off-the-clock” work with bonuses for managers who keep labor costs at or below an established level.

Doesn't sound like a very good company to work for. I go to a JJ's near my house quite frequently and it's rare to see the employees last more then a few months before they quit.

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I personally doubt it is enforceable because I don't think the work involved will be viewed as skilled or proprietary, which is what I have in my head what the courts look at if someone tries to enforce a non compete clause against an employee who has left the organization.

Could one of the lawyers here comment on that?

Oh man, where's the fun if you're going to limit comments to just the lawyers?

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I personally doubt it is enforceable because I don't think the work involved will be viewed as skilled or proprietary, which is what I have in my head what the courts look at if someone tries to enforce a non compete clause against an employee who has left the organization.

Could one of the lawyers here comment on that?

That's pretty much what I was thinking especially considering the scope of the restrictions.

I've worked with non competes that I thought were fairly stupid considering my duties. Whatever company secrets I knew were pretty common knowledge and it wasn't like I was going to bring new business along with me.

In fact, the one time it was enforced the client had already left and would have liked to have me follow. The reason I left was I knew they were switching services for corporate reasons and wanted to avoid possible retribution.

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I think they would be enforcable if it's pretty clearly laid out, I don't see why you could enforce one but not the other... jobs are jobs. But I also think this wouldn't be worth the time of Jimmy John's to go after... if a guy left JJ to go to Subway, big deal. At a place like Subway you can't add your own way of doing things, it's all laid out by the corporation, even for franchisees. You can't make the sub your own way. It's all pre-decided.

I think this is more about a guy leaving JJ and opening up his own subshop with techniques he learned.

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I think they would be enforcable if it's pretty clearly laid out, I don't see why you could enforce one but not the other... jobs are jobs. But I also think this wouldn't be worth the time of Jimmy John's to go after... if a guy left JJ to go to Subway, big deal. At a place like Subway you can't add your own way of doing things, it's all laid out by the corporation, even for franchisees. You can't make the sub your own way. It's all pre-decided.

I think this is more about a guy leaving JJ and opening up his own subshop with techniques he learned.

I'd guess this as well.

If I am not mistaken, JJ's are the ones who have to get an injunction to prevent someone working for a competitor, and I can't imagine they would spend the time or money preventing anyone other than manager level and above to compete against them.

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I personally doubt it is enforceable because I don't think the work involved will be viewed as skilled or proprietary, which is what I have in my head what the courts look at if someone tries to enforce a non compete clause against an employee who has left the organization.

Could one of the lawyers here comment on that?

Courts don't like enforcing non-compete clauses even if the work involved is skilled or proprietary, because it's generally thought that parties in the labor market should be free to contract with one another--that's the entire essence of what makes our economy run. If you're forced to sit at home and not work, you're not out there producing for our economy. And your potential productivity is even higher if you are a skilled worker. People sitting at home because of a non-compete clause is seen as economic waste.

There is some tension between this freedom to contract and "freedom of contract," the doctrine that suggests that two people should be free to agree to any sort of arrangement they want, as long as it's not contrary to law. But the idea of the free labor market has won out.

I see virtually zero (0) chance that any court would enforce this Jimmy John's contract, so it's a curious thing as to why they are including it anyway. It doesn't serve them any benefit, and it makes them look like tools.

Edited by TheCouga
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Also, whether "skilled" or "proprietary" are criteria to be used varies by jurisdiction, and there's nothing particularly special about those two criteria (although those are two criteria that are often used). This is one of those issues that varies by state, and it's a very discretionary standard. Courts, if they allow them to be enforced at all, routinely trim down the scope of these clauses and enforce them only to the minimal extent that the business is actually at risk for harm. The two main issues as far as scope goes are time and geographic location. They will shorten up the time period or the X mile radius they cover to allow the employee to employ himself if the business isn't really at risk.

It's kind of a mushy area of law, and there's usually not a ton of hard and fast rules. But they are generally disfavored.

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Taking Chantix away from CDL-A holders and transportation nationally was asinine.

Also this:

(If a driver takes a second job with a non-motor carrier, do those hours affect compliance with the hours-of-service rules?

Yes. Under 49 CFR §395.8(a), drivers must record their duty status for each 24 hour period, including all on-duty time. The definition of "on-duty time" in §395.2 includes "performing any compensated work for a person who is not a motor carrier." Therefore, all compensated work, whether for a motor carrier or not, must be included on the log as on-duty time and counted against the driver's available hours.)

All compensated work. On a day off. B capital S with a hit.

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I think they would be enforcable if it's pretty clearly laid out, I don't see why you could enforce one but not the other... jobs are jobs. But I also think this wouldn't be worth the time of Jimmy John's to go after... if a guy left JJ to go to Subway, big deal. At a place like Subway you can't add your own way of doing things, it's all laid out by the corporation, even for franchisees. You can't make the sub your own way. It's all pre-decided.

I think this is more about a guy leaving JJ and opening up his own subshop with techniques he learned.

That, and just trying to freeze their own workers in place to cut down on turnover. If it takes a kid 2 weeks on average to figure out that JJ really can't stop him from going to Subway, then publicizing the clause probably accomplishes what it was meant to.

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That, and just trying to freeze their own workers in place to cut down on turnover. If it takes a kid 2 weeks on average to figure out that JJ really can't stop him from going to Subway, then publicizing the clause probably accomplishes what it was meant to.

That's a really bad way of reducing turnover. I've seen this thing shared on Facebook, and people think it's outrageous. Their legal/HR department better start talking to their marketing department.

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Courts don't like enforcing non-compete clauses even if the work involved is skilled or proprietary, because it's generally thought that parties in the labor market should be free to contract with one another--that's the entire essence of what makes our economy run. If you're forced to sit at home and not work, you're not out there producing for our economy. And your potential productivity is even higher if you are a skilled worker. People sitting at home because of a non-compete clause is seen as economic waste.

There is some tension between this freedom to contract and "freedom of contract," the doctrine that suggests that two people should be free to agree to any sort of arrangement they want, as long as it's not contrary to law. But the idea of the free labor market has won out.

I see virtually zero (0) chance that any court would enforce this Jimmy John's contract, so it's a curious thing as to why they are including it anyway. It doesn't serve them any benefit, and it makes them look like tools.

To take such consideration into a case subverts the intent having a judge. The attorneys may plead their case and bring such to the bar, but the judge should impartially interpret the law and rule accordingly. Economics should not be a factor.

At the same time, I agree with your assessment.

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To take such consideration into a case subverts the intent having a judge. The attorneys may plead their case and bring such to the bar, but the judge should impartially interpret the law and rule accordingly. Economics should not be a factor.

At the same time, I agree with your assessment.

This is a case where the law is almost entirely judge-made. The old rule dates back to the 1700s and even before. It actually started out that non-competes were never allowed...it was the judges that eventually allowed them that were making the exception. And they did this because they prioritized freedom of contract over freedom to contract.

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That, and just trying to freeze their own workers in place to cut down on turnover. If it takes a kid 2 weeks on average to figure out that JJ really can't stop him from going to Subway, then publicizing the clause probably accomplishes what it was meant to.

I think it is purely to try to create a barrier to entry for former employees who try to set up their own sandwich shop.

Any employees that either stay longer as a consequence or negative publicity that comes out of it is just ancillary benefit or collateral damage.

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I doubt a worker at Jimmy John's is going to be exposed to any secrets or anything like that in which the pubic couldn't figure out on their own by ordering a sandwich. In national chains the food is all prepackaged specific for each chain, even fresh items are intended just for that chain all from approved suppliers. The approved suppliers is one way that Little Caesar's is so successful. They own Blue Line Distribution so they get a franchise to pay the franchise fee, plus any other royalties they might charge, then they lock him in as a customer through Blue Line. Franchisee assumes all the risk and has little flexibility.

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I doubt a worker at Jimmy John's is going to be exposed to any secrets or anything like that in which the pubic couldn't figure out on their own by ordering a sandwich. In national chains the food is all prepackaged specific for each chain, even fresh items are intended just for that chain all from approved suppliers. The approved suppliers is one way that Little Caesar's is so successful. They own Blue Line Distribution so they get a franchise to pay the franchise fee, plus any other royalties they might charge, then they lock him in as a customer through Blue Line. Franchisee assumes all the risk and has little flexibility.

Exactly right.

The only ones making money with Little Caesers is the Illitch's.

It's a very successful method of operation and the same thing they've employed with their sports franchises. Own the concessions, parking, nearby restaurants, casino, inter-mingle the advertising so one entity is paying the other etc....

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I doubt a worker at Jimmy John's is going to be exposed to any secrets or anything like that in which the pubic couldn't figure out on their own by ordering a sandwich. In national chains the food is all prepackaged specific for each chain, even fresh items are intended just for that chain all from approved suppliers. The approved suppliers is one way that Little Caesar's is so successful. They own Blue Line Distribution so they get a franchise to pay the franchise fee, plus any other royalties they might charge, then they lock him in as a customer through Blue Line. Franchisee assumes all the risk and has little flexibility.

This was my thought. What is the point in holding an entry level employee down by installing this clause? They are not privy to anything. There is a bunch of meat with a bunch of veggies and some bread. WTF is the point?

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This was my thought. What is the point in holding an entry level employee down by installing this clause? They are not privy to anything. There is a bunch of meat with a bunch of veggies and some bread. WTF is the point?

It might be that some locations are extremely busy and as most of the JJ's are located in strip malls, they don't want someone opening up next door syphoning of their business if they can prevent it. Of course they can't prohibit everyone, but if they can prohibit a former employee from doing it, I suppose it's better than nothing.

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It might be that some locations are extremely busy and as most of the JJ's are located in strip malls, they don't want someone opening up next door syphoning of their business if they can prevent it. Of course they can't prohibit everyone, but if they can prohibit a former employee from doing it, I suppose it's better than nothing.

thing is, it's not the sandwich maker that is going to open up next door, it would be the manager at minimum. If they were worried about competing stores, it would make sense to have non-competes for the managers, but not the sandwich makers. The average 18 yr old working part time making sandwiches is not a business loan candidate. Now if they meant to write a non-compete for 'operation' and they included sandwich makers because managers also work the store, that might be one thing, but it's then not really sandwich making that is the subject of the non-compete - it's operating a sandwich shop - which is not the same occupation really. Maybe the language in the OP is just not precise to the case, but it clearly implies they are signing down the line sandwich makers to non-competes. They are not much of a risk to start a business.

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