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Confidential Sandwich from Jimmy John’s

Jon Allison

Non-compete agreements are generally used with high level employees with knowledge of confidential information about the business.  Jimmy John’s, however, makes lower wage workers like sandwich makers and drivers sign non-compete agreements.  The non-competes prevent employees from working for a competitor for 2 years after termination from Jimmy John’s at any restaurant that derives more than 10% of its revenue from selling submarine, hero, deli-style, pita and/or wrapped or rolled sandwiches located within 3 miles of any Jimmy John’s.

To be enforceable, in most states non-compete agreements cannot be overly broad and must protect some legitimate business interest.  While Jimmy John’s non-compete agreements probably are not enforceable, low wage workers are less likely to know that.  They are also less likely to have the resources to get advice from an attorney.

According to the Huffington Post, Jimmy John’s non-competes have the attention of Congress.  House Democrats are asking the Labor Department and the Federal Trade Commission to look into Jimmy John’s use of non-compete agreements.



Randy Freking

Employees are increasingly being asked to sign agreements that prohibit them from working for a company’s rivals, according to a June 8, 2014 column in the New York Times.The particular situation highlighted in the article illustrates this problem.

Colette Buser is a 19 year old college student who worked as a counselor the three previous summers at a camp in Wellesley, Massachusetts. When she applied for another summer camp job this year, the summer camp withdrew an offer of employment to her because it feared that her previous summer camp would sue to enforce a noncompete clause tucked into Ms. Buser’s 2013 summer employment contract.

Noncompete clauses now appear in far more employment fields beyond the traditional worlds of technology, sales, and major corporations with tightly held secrets. The clauses appear to be extending to nearly every field of employment, from event planners to chefs to yoga instructors. Ironically, they are often required by employers who hail “competition” as a bedrock of our economic system of course, when it benefits them.

Prospective employees being asked to sign noncompete agreements should recognize that noncompete agreements are governed by state law. Courts in Ohio, Indiana, and Kentucky have differing rules regarding the enforcement of noncompete agreements and employees should understand those restrictions before signing noncompete agreements.

The good news is that some courts are becoming increasingly hostile to full enforcement
of noncompete agreements because employers often overreach by including unreasonable geographic and time limitations in the clauses. Any employee who has a noncompete agreement and wishes to seek other employment should fully understand their rights and the laws governing the noncompete agreements, depending upon the particular jurisdiction.



Merry Christmas from Freking and Betz (But not Rand Paul)

Randy Freking

As we celebrate the Holidays and Christmas this week, Freking and Betz wishes everyone a wonderful holiday season, and best wishes for 2014. For those suffering from unemployment, we wish you success in your efforts to find new employment and we hope Congress decides to continue extended unemployment benefits for workers unable to find new jobs.

On the other hand, Senator Rand Paul (R-Ky) hardly wishes the long unemployed well. Rather, he thinks we do a “disservice” to reach out a helping hand to those who have been unemployed for more than 26 weeks. Read about his comments in this article from The New York Times.




Forced Arbitration Is Bad for All Americans

Mark Napier

The U.S. Senate Judiciary Committee held a hearing on December 18 on the pending Arbitration Fairness Act of 2013 (S.878 / H.R. 1844.) This bill is critical to employees, nursing home residents, credit card holders, banking customers, and other consumers – virtually all Americans. Forced arbitration language is becoming commonplace in employment handbooks and consumer agreements. Persons who agree to forced arbitration typically never know they forfeited their rights until a dispute arises.

Forced arbitration takes away the rights of the employee or consumer to seek redress in our courts. Forced arbitration favors Big Business who gets to call the shots on where, when, how, and who decides the employee’s or consumer’s dispute. Forget about an unbiased jury or judge, discovery procedures to uncover evidence, and reasonable costs. Without passage of the Arbitration Fairness Act, Big Business gets to eliminate most employment civil rights and consumer protections. Congress must protect Americans from forced arbitration and restore Americans’ rights to seek justice in our courts with unbiased jurors, not hired arbitrators paid for by Big Business.

Please email your U.S. Senator and Representative today to urge passage of the Arbitration Fairness Act.  You may also contact Richard Cordray, the Director of the Consumer Financial Protection Bureau.



Ann Wittenauer

A server from New York shed a spotlight on the effect that the practice of “dining and dashing” has on a server’s pay.  Suzanne Parratt used social media to report that she was terminated because she refused to cover the tab of diners who left without paying.  According to an article in Slate Magazine by Luke O’Neil, the practice of making servers pay tabs when diners do not is common in the industry.  Moreover, federal law offers servers only limited protection, and in many states, restaurants may legally dock wages from servers for unpaid tabs.  Thus, dining and dashing is not a harmless practical joke on a restaurant, it hurts hard-working individuals.  To learn more, read the article.