Late last year, the Huffington Post reported that Jimmy Johns sandwich shops have included a noncompete clause in its contracts with company sandwich makers and delivery people. While these clauses are commonly found in contracts of high-level employees who have access to company secrets and client lists, many are baffled that Jimmy Johns would impose such a clause on the people who clog your arteries with meat and cheese deliciousness and make your boss happy by ensuring you never have to leave your desk.
Is Jimmy Johns protecting themselves in a hyper-competitive market or are they acting unreasonably and offending basic employment freedoms?
Former employees bringing a class action lawsuit against the company and one of its franchises are arguing the latter. While the initial suit centered on wage theft, the petitioners have modified it as to include claims against the use of noncompete clauses in their contracts. They assert that those clauses serve no legitimate purpose and instead are contractual embodiments of workplace intimidation as they prevented workers from gaining similar employment upon leaving the company. For many unskilled workers, this poses a particularly grave threat. Jimmy Johns, like other companies, have cited an increase in market-competition and view noncompete clauses as a tool to ensure company success.
Not only do these noncompete clauses affect moves of workers from one franchise to another, but they also impact the relationship between franchises and privately held companies. Will the use of noncompete clauses for the average franchise worker stifle entrepreneurship and economic growth? Will the clauses inspire non-franchising companies to institute similar policies to hold onto workers? While it is unclear how many sandwich makers at Jimmy Johns possess the funds and connections to open their own café, the non-compete clauses may have a more general effect of creating an environment of fear and suppression among workers. What does this say about the economic landscape when franchises that ground themselves on the ideas of growth and opportunity impose these noncompete clauses?
In some employee-employer relationships there is a need for noncompete clauses, but whether or not those reasons are legitimate with respect to every employee is up for debate. So the next time your take a bite out of your turkey club mulling over that assignment due at the end of the day, think about all the ingredients that went into making that sandwich.
Sources:
http://www.huffingtonpost.com/2014/10/13/jimmy-johns-non-compete_n_5978180.html
http://www.huffingtonpost.com/2014/10/21/jimmy-johns-noncompete-ag_n_6024056.html