Sandwich chain Jimmy John's sued over noncompete agreements

June 9, 2016

Illinois Attorney General Lisa Madigan is suing the Jimmy John's sandwich chain accusing it of improperly forcing low-level employees to sign agreements preventing them from seeking jobs with competitors.

Madigan announced the lawsuit against Champaign, Illinois-based Jimmy John's on Wednesday. She called the noncompete agreements unfair.

Jimmy John's said in a written statement that it was surprised by the lawsuit. The company said it had informed Madigan earlier that it would not try to enforce the agreements and no longer uses them.

Madigan says Jimmy John's initially said it stopped using noncompete agreements in 2015 but later said the policy change was never implemented.

The agreements prevent employees from working for any business within three miles of a Jimmy John's store that derives at least 10 percent of its revenue from submarine or deli sandwiches. The agreement is effective for two years after the employee's departure from Jimmy John's.

In April, a federal judge in Illinois declined to grant an injunction that would have prevented Jimmy John’s franchisees from trying to enforce the noncompete agreements. Judge Charles Kocoras said the individuals who filed suit against the sandwich chain suffered no harm because the company never enforced the agreement.


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