UPDATE: Jimmy Johns Wins the First Round of the Non-Compete Debate

In a case that we first wrote about in December and one that has gained national headlines – a former Jimmy John’s employee is suing the freaky fast sandwich maker over potential wage violations and an alleged unlawful non-compete agreement.

Plaintiffs Emily Brunner and Caitlin Turowski worked for Jimmy John’s as delivery drivers and later as Assistant Managers.  As a part of their employment, they signed non-compete agreements prohibiting them from working within a three (3) mile radius of Jimmy John’s stores.  The agreement specified that the prohibition covered any employer who gains in excess of 10% of its revenue from selling sandwiches.

Jimmy John’s non-compete agreements have attracted national attention because of the employment restrictions placed on purportedly low-skilled workers.  Opponents of such agreements argue that rank and file employees are ill-equipped to defend themselves against enforcement of such agreements compared with higher paid, skilled workers.  In other words, opponents have taken the position that regardless of enforceability, which varies greatly from state to state, the agreements intimidate employees from exploring other employment opportunities.  This position is an ancillary argument for those who take the position that non-compete agreements are unlawful in and of themselves.  This matter has garnered such attention that members of Congress have asked the Department of Labor and the Federal Trade Commission to investigate the practice.

Brunner and Turowski brought their lawsuit before an Illinois Federal Court seeking to have the non-agreements nullified and further claimed entitlement to lost wages for improper pay practices.  As a part of their efforts, the Plaintiffs moved for injunctive relief to prevent Jimmy John’s from enforcing the agreements while the matter was pending in order to prevent irreparable harm by not being able to work due to the oppressive non-compete agreements.

On April 8, 2015, U.S. District Judge Charles Kocoras ruled against Brunner and Turowski’s motion for injunctive relief.  In an opinion issued Wednesday, Judge Kocoras ruled that since the non-compete clause had never been enforced against Brunner and Turowski, the two had never been hurt by it and had no standing to seek an injunction against it.  “The lack of any prior enforcement diminishes the Plaintiffs’ argument that the wrongful conduct will occur again because no injury occurred to begin with,” Kocoras wrote in his decision.

As part of the case, Jimmy John’s pledged that it would not enforce the non-compete agreements against Brunner and Turowski going forward.  The Judge found that this promise (made in supporting affidavits)  “satisfied their burden of establishing that the challenged conduct will not ‘reappear in the future” and thus making injunctive relief unnecessary.  In other words, the Judge accepted Jimmy John’s argument that there was no controversy since the non-compete agreement was never enforced.

While the final outcome of this debate remains to be seen, one thing is for certain, non-competes will be a hotly debated employment law issue on a state and federal level throughout 2015.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters, including those relating to wage and hour compliance, for almost sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

 

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