When the employer goes too far: The Jimmy John’s Non-Compete
I like Jimmy John’s sandwiches. Fast service and a decent sandwich. Unfortunately it pains me to reflect on the non-compete that they are apparently using with their workers. Yes, the gentleman or lady behind the counter is now subject to the following:
Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop.
Seems a little over the top? Basically a court that actually enforced such an agreement would have to prevent a Jimmy John’s worker from working in the sandwich business anywhere within 3 miles of a Jimmy John’s store. In Dallas that would mean you couldn’t work for any sandwhich shop in all of the Dallas Ft.Worth Metroplex. You might be able to find something in a more rural area.
The Jimmy John’s non-compete is symbolic of something more troubling than a bad non-compete agreement. It’s a bad non-compete agreement that I would suspect Jimmy John’s never intends to enforce. Non-competes are desinged to protect interests worthy of protection. This could include training, proprietary information, trade secrets, good will, and other financial considertation in Texas. I find it hard to believe that a low level Jimmy John’s sandwhich maker ever received any of these things as part of his employment. Maybe I’m wrong.
The power of the Jimmy John’s non-compete is that it might make a employee rethink moving to a competitor or from leaving Jimmy John’s in the first place. It is highly unlikely that a lower level entry worker is every going to challenge the non-compete in court. The same probably also holds true for Jimmy John’s. Do they really envision a scenario where the individual sandwich maker is able to leave with the secrets of Jimmy John’s or takes customers with him? I think not. I doubt there are few documented cases of a Jimmy John’s employer went to a competitor in a lower level position.
I represent employers that enforce non-compete and other post-employment covenants. They have interests that are worthy of protection. When employers use non-competes in the wrong circumstances it undermines the employer who is trying to enforce a legitimate non-compete agreement. Jimmy John’s has gotten a lot of bad press over its non-compete. I suspect they might be reconsidering its use.
