Illinois AG Madigan Sues Jimmy John’s Over Worker Non-Compete Clause

Attorney General Lisa Madigan has filed a lawsuit against Champaign-based Jimmy John’s for the non-compete agreement it requires for employees at its 300 sandwich shops in Illinois. The agreement forbids employees from working at any other nearby related business, both during their employment and for two years after.

“Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses,” Madigan said, in a press release. “By locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits.”   

The agreement, signed as a condition of a worker's employment, applies to any sandwich located within three miles (later modified to two miles) of any Jimmy John’s in the country both during their employment and for two years after.   The employees can't work in any business that earns more than 10-percent of its revenue from selling "submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches."

Jimmy John’s has shops in 46 states. 

Madigan says the agreement is illegal and unenforceable under Illinois law.  She says Jimmy John's initially said it stopped using non-compete agreements in 2015 but later said the policy change was never implemented.

Jimmy John's corporate office referred questions to an outside public relations firm.  

A statement was issued on behalf of the company late Wednesday, stating Madigan's office approached the company in 2015 to discuss concerns over the non-compete agreements, saying Jimmy John's was 'cooperative and and transparent throughout the process.'

"Though the Attorney General never indicated to us that any worker had ever reported a concern about the agreements, we made clear to the Attorney General that we would never enforce a non-compete agreement against any hourly employee that might have signed one.  We offered to have our CEO sign a declaration to that effect, and pointed the Attorney General to an April 2015 ruling dismissing a federal claim against Jimmy John’s over the use of non-compete agreements, on the grounds that those agreements were not at risk of being enforced. We also told the Attorney General that the agreements had been removed from new-hire paperwork and taken out of use long before their inquiry began. When we learned that, through an administrative error, certain company stores were using outdated, pre-printed paperwork, we immediately corrected the error and voluntarily informed the Attorney General. We remain committed to resuming productive discussions with the Attorney General."