201411.05
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Freaky Fast, Freaky Good, Freaky Proprietary Practice

You’ve probably seen Jimmy John’s commercials boasting of the deliciousness of their sandwiches and the speed—it’s “freaky fast”—with which those delicious sandwiches will reach your belly. But the company has been in the news recently for a much different reason—the noncompetition clauses it includes in its employment contracts.

This doesn’t just apply to management and corporate types. One Jimmy John’s franchisee, speaking on the condition of anonymity, told the Huffington Post that the clauses are a part of the company’s standard hiring packet given to all employees—including the cashiers and the assembly line of folks putting your sandwich together in the shop down the street.

So just what is an employee agreeing not to do? Plenty. The contracts prevent the employee, while employed and for two years after, from working for any business that gets more than 10% of its sales from submarine-type sandwiches and is located within three miles of a Jimmy John’s. Subway is out, of course, but the “10%” number could keep out lots of other establishments as well. As for the three-mile radius, in Columbus alone an employee would be barred from most hoagie work inside the 270 outerbelt.

This isn’t to say that Jimmy John’s doesn’t have the right to protect itself. For a lot of businesses, clauses like these make sense. If you ran Microsoft, you wouldn’t want people on your software development team to jump ship to Apple, where they could use their unique skills to develop a competing product. The clauses probably even protect Jimmy John’s from defections by mid-level managers or franchisees, who may theoretically be able to supply direct competitors with demographic information, sales figures, and the like.

But the company would have a much harder case proving that a high-school student working part time has gained some proprietary insider knowledge about how to put meat and cheese between two slices of bread.

So why does the company ask their bottom-tier employees to sign off? As the Huffington Post article points out, Jimmy John’s has little to lose. Even if a judge doesn’t uphold the clause, just knowing that it’s in your contract may have a chilling effect on employees looking for new work, or looking to challenge the company in court.

Whether Jimmy John’s practice of using noncompete agreements so broadly is a good idea for your business is another question.

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