question archive After an investigation by then-New York attorney general Eric Schneiderman, fast-food franchisor Jimmy John's announced in 2016 that it would not enforce non-compete agreements signed by low-wage employees that prohibited them from working at other sandwich shops, and it agreed to stop using the agreements in the future
After an investigation by then-New York attorney general Eric Schneiderman, fast-food franchisor Jimmy John's announced in 2016 that it would not enforce non-compete agreements signed by low-wage employees that prohibited them from working at other sandwich shops, and it agreed to stop using the agreements in the future
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After an investigation by then-New York attorney general Eric Schneiderman, fast-food franchisor Jimmy John's announced in 2016 that it would not enforce non-compete agreements signed by low-wage employees that prohibited them from working at other sandwich shops, and it agreed to stop using the agreements in the future. Jimmy John's non-compete agreement had prohibited all workers, regardless of position, from working during their employment and for two years after at any other business that sold "submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches" in a geographic area within two miles of any Jimmy John's shop anywhere in the United States.
Schneiderman said of the agreements, "They limit mobility and opportunity for vulnerable workers and bully them into staying with the threat of being sued." Illinois Attorney General Lisa Madigan had also initiated action, filing a lawsuit that asked the court to strike down such clauses. "Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses," Madigan said. "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."
Jimmy John's has more than 2,500 franchises in forty-six states, so its agreement meant it would be difficult for a former worker to get a job in a sandwich shop in almost any big city in the United States.
Based on what you have read in this unit, answer the following questions:
- Other than being punitive, what purpose do non-compete agreements serve when low-level employees are required to sign them?
- Suppose an executive chef or vice president of marketing or operations at Jimmy John's or any large sandwich franchise leaves the firm with knowledge of trade secrets and competitive strategies. Should he or she be compelled to wait a negotiated period of time before working for a competitor? Why or why not?
- What is fair to all parties when high-level managers possess unique, sensitive information about their former employer
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Answer:
A non-complete agreement refers to a contracts which an employees signs with the employer stating he/she (employee) will not compete with the employer if he/she stops working for the business for a certain period and a specific area.
Step-by-step explanation
1 - It reduces the employee turnover
- It makes it more difficult for the employee to leave since they cannot work in another business.
- It also decreases the pressure on the employer to improve wages and benefits to keep staff.
2 Yes she/he can be compelled to wait. failure to do so would lead to a plenty of damage to the employer if they leave and immediately start a competing business. They therefore should wait for a considerable time and and be limited to a certain geographical area.
3 The employers should enforce non complete that will not last too long, covers too much geographical area, or that which places too many limits on employees right to look for a better job without leaving his profession.
