Non-compete agreements have been in use in the top tiers of American companies for several years now. The idea is to protect the interests of the company by making sure that executives or other employees with trade secrets and confidential information don’t take those secrets to a competitor, where they can be used against the company. Non-compete agreements began in the big tech companies, where keeping the company’s latest developments was of the utmost importance in order for the company to be able to effectively compete in the marketplace.
Non-compete agreements impose restrictions on when and where an employee can work after leaving the company. Usually, the employee cannot go to work for a direct competitor within a certain reasonable geographical radius of the company and within a certain reasonable time frame after leaving the company. This means that an employee is generally allowed to go work for a company’s competitor, only if the competitor is located in a different city or state from the company. Often, employees can work for whomever they want wherever they want within six months to a year after leaving the company. The lag time is usually sufficient to render useless any trade secrets the employee might have.
For executives or employees who are working with trade secrets, helping to develop new products for the company, etc., it may makes sense that the company would want to protect their investment by preventing those employees from going to work for a competitor. It does not make sense for companies to require hourly employees making sandwiches to sign a non-compete agreement, yet that is allegedly the case for certain Jimmy John’s employees.
It is hard to believe that the people making sandwiches, on the bottom rung of the proverbial ladder, have any valuable trade secrets that Jimmy John’s would not want shared. Other cases of hourly, minimum-wage employees have been reported, but it is rare for a company to enforce the non-compete agreements of these employees. Jimmy John’s, on the other hand, according to the New York Times has allegedly taken steps to actively restrict the alternate employment options of its sandwich makers. The Time’s blog does say that there is no reported case of Jimmy John’s actually seeking to enforce this provision.
Aside from the fact that requiring hourly employees to sign non-compete agreements does not appear to provide significant value to the company, it puts the employee at a distinct disadvantage. When high level executives sign non-compete agreements, they are sometimes able to negotiate the terms of their contract on a more even footing and they tend to receive some sort of compensation in exchange for signing the non-compete agreement. For example, their employment contract might state that they will be paid for the entire duration of the contract, even if they get fired before the contract’s termination.
The sandwich makers, on the other hand, are allegedly made to sign the non-compete as a condition of employment even though it doesn’t seem likely they would have access to any top secret information. In today’s struggling job market, many overqualified employees are made to take hourly, low-paying positions at various fast food restaurants just to pay the bills. They are rarely in a position to negotiate the terms of their contract, much less reject an employment contract, even if its terms are grossly unfair. It is also for this reason that prohibiting these employees from seeking a better job with higher pay with a competitor it can be argued would be extremely unfair to the employee.
At a time when some companies are spending a record low percentage of their earnings on employee salaries, this sort of conduct is not fair. Some companies are choosing instead to put more money in their own pockets and the pockets of their shareholders, rather than investing in their employees. A company that does not invest in its employees or earn the right to require a long term commitment can hardly expect the kind of loyalty from those employees that a non-compete agreement implies.The Chicago non-compete agreement attorneys at Lubin Austermuehle near Chicago and Oak Brook represent business owners and professionals regarding non-competition agreements, covenants not to compete, restrictive covenants and other claims throughout the Chicagoland area, including Wheaton and Naperville; and in the Mid-West region, including Indiana, Wisconsin and Iowa. You can contact us by calling our toll free number 630-333-0333 for a consultation or contact us online by filling out the form at the side of this blog.