Jimmy John’s agrees not to enforce non-compete agreement

NEW YORK, N.Y. – New York Attorney General Eric Schneiderman says the Jimmy John’s sandwich chain has agreed to stop including non-compete agreements in hiring packets used for low-wage workers.

Schneiderman said Wednesday that such agreements “bully” workers into staying under threat of being sued, and companies should stop using them for minimum-wage employees.

The sample non-compete agreements Jimmy John’s sent its franchisees prevented employees from working for any nearby business that gets at least 10 per cent of its sales from sandwiches for two years after they left.

Jimmy John’s said it assured Schneiderman’s office it wouldn’t support the enforcement of a franchisee’s non-compete agreement against a worker. Franchisees in New York that used the non-compete agreements have agreed to void past agreements and stop using them, the attorney general’s office said.

According to the settlement, Jimmy John’s had told the attorney general’s office that it stopped providing franchisees with the sample agreements in late 2014. But Schneiderman’s office said it found franchisees still used the non-compete agreements, believing that they were required to do so.

Earlier this month, Illinois’ attorney general also sued Jimmy John’s for improperly forcing workers to sign agreements preventing them from seeking jobs with competitors. Jimmy John’s said it had informed that attorney general’s office that it would not try to enforce the agreements and it no longer uses them.

Last week, Schneiderman’s office also announced a settlement with a legal news site, Law360, which agreed to stop requiring reporters and other employees to sign non-compete agreements.