Jimmy John’s To Pay $100K In Illinois Settlement Over Non-Compete Clauses

Image courtesy of Chris Wilson

Earlier this year, Jimmy John’s announced, as part of a settlement with the New York attorney general’s office, that it would stop using strict non-compete clauses preventing workers from taking their sandwich-craft elsewhere, even if they were fired. Now, JJ has entered into a similar agreement with the Illinois attorney general’s office that includes a $100,000 payment to establish education and outreach programs. 

Illinois Attorney General Lisa Madigan announced the settlement on Wednesday, putting an end to a months-old lawsuit that alleged Jimmy John’s illegally required all employees to sign a highly restrictive non-compete agreement as a condition of employment.

The clause used by Jimmy John’s stated:

“Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop.”

Under the Illinois settlement, Jimmy John’s will pay $100,000 to the state’s attorney’s office to create education and outreach programs to promote best practices by employers.

Additionally, the company will notify all current and former employees and franchisees that it will no longer enforce non-compete clauses.

That stipulation may be for naught, however, as the company announced in June that it would stop including noncompete agreements in its hiring packets and advise franchisees that it would not support the enforcement of the clause.

“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 in a statement.

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