Jimmy John’s pays $100K in settlement over non-compete clauses

Jimmy John’s will pay $100,000 in a settlement over an improper non-compete clause in employee contracts, Attorney General Lisa Madigan announced on Wednesday.

Jimmy John’s, which has about 300 sandwich shops in Illinois, forced the non-compete agreement on its sandwich makers and delivery drivers, according to a statement from Madigan. The restriction did not allow employees to work for any sandwich shop in the country located within a few miles of a Jimmy John’s.

In June, Madigan filed a lawsuit against Jimmy John’s for the restriction which prevented employees from working for two years at any other business that earns most of it’s revenue from selling sandwiches, the state’s attorney’s office said.

The settlement requires the company to pay $100,000 to the state’s attorney’s office to create education and outreach programs to promote best practices by employers, prosecutors said.

It also requires Jimmy John’s to notify all current and former employees and franchisees in Illinois of the change. The company must remove all non-competes from new employee manuals, and use non-competes only in a way that complies with Illinois law.

“This settlement helps ensure Illinois’ workers have freedom to change jobs in order to seek better wages, further their careers and improve their lives,” Madigan said. “Workers in Jimmy John’s sandwich shops should know they are not subject to these unfair and unenforceable agreements.”

Beginning in January 2017, the Illinois Freedom to Work Act will prevent businesses from having non-compete agreements for employees who make less than $13 an hour, prosecutors said.