Friday, October 17, 2014

Jimmy John's employees and non-compete agreements

Via the Huffington Post, I see that the sandwich shop Jimmy John's is requiring non-compete agreements:
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.
I presume that this agreement has never been enforced, but it is funny/sad nonetheless. 

8 comments:

  1. This is further evidence of a STEM worker shortage. (Sandwich, Tempura, Empanada, Muffins). It's a shortage of extremely highly skilled labor, because not just anyone can science together a sandwich without spending over a decade in specialized schooling. We need to encourage all our children to go to culinary arts institutes and take out mortgage-sized loans in the process. In the mean time, we need to expand the Sand-1BLT visa cap to allow the best and brightest sandwich workers from around the world to help fill the gap.

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  2. perhaps this is a clause that is only enforced if someone opens their own Subway/Quiznos/etc franchise across the street? if I were going to pop the 19K-30K for a franchise license + building + initial payroll and inventory I would probably get a job as a cashier/'artist' at a future competitor for a bit to know the market.

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    1. I'd bet you need more scratch than that to get a franchise. My brother-in-law looked into a Dairy Queen franchise a few years back. One of the criteria to qualify was having a half a million in *liquid* assets.

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    2. Usually the expectation in a new area is several locations opening in one go. I saw documentation once for Krispy Kreme and I think they wanted plans for 3-5 within a certain time frame. I can't believe the length (two years), I imagine this would be uneforceable, but it annoys me they even try to write them in the first place for a position like this.

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  3. Actually, non-competes are generally unenforceable except in the most IP-heavy positions.State law governs the degree to which they are enforceable, however, a non-compete must be "reasonable" for it to have teeth. There are many articles available out there, here's one for example: http://www.hrexaminer.com/is-your-non-compete-agreement-enforceable/ I'm not thinking that Jimmy Johns has a lot of of IP there.

    Whenever I begin to work for a client, I always request an non-disclosure agreement, which is a form of non-compete. Some of them are just plain unreasonable, the worst I have seen was 12 pages. I usually read through the whole thing, get out my nasty red marker and start striking out lines until it becomes reasonable and send it back. The usual comment I get is, "You're the first consultant to ever read this."

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    1. My former employer threatened to sue several people over non-compete clauses. It was an empty threat; the company ended up dropping the lawsuit in every case I'm aware of. They can stop people from stealing IP, but not from making a living.

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