Jimmy John’s recently required its Illinois employees to sign highly restrictive non-compete agreements. These agreements would effectively prevent the individuals from working at most food-related companies in the nation. The company’s actions were so egregious Illinois passed a law prohibiting employers from using non-compete agreements for employees earning $13 or less per hour.
Illinois’ Attorney General, Lisa Madigan, also filed suit against the Corporation for unfair labor practices. In essence, the lawsuit claims the company forced its employees to sign the non-compete agreements, knowing they were unenforceable, in an attempt to chill any effort by employees to consider leaving for another employer.
This week, the Illinois Attorney General and Jimmy John’s reached a settlement in the case. The company settled the case with Illinois for $100,000, and further agreed to:
- notify all current and former employees the agreements are non-enforceable;
- rescind any non-competes used based on the unenforceable agreement;
- remove all non-compete from the new-hire process; and
- comply with Illinois law regarding non-competes in the future.
Unfortunately, instead of using non-compete agreements to protect a legitimate business interest, companies are increasingly using the documents to simply dissuade employees from working someone else. Courts are clear that simply using a non-compete to discourage an employee from quitting or working for a competitor are not in-and-of-themselves legitimate business interests for purposes of non-compete agreements. If you have signed a covenant not to compete or other business agreement, it is highly advisable to speak with an attorney to learn your legal rights.