IL AG files lawsuit against Jimmy John's alleging unfair labor practices

CHICAGO (WLS) -- Illinois Attorney General Lisa Madigan filed a lawsuit Wednesday against Jimmy John's corporate entities for allegedly imposing highly restrictive non-compete agreements on its employees, including low-wage shop workers and delivery drivers who make and deliver sandwiches.

"Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses," Madigan said in a statement. "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."

The suit alleges Jimmy John's requires all workers to sign a non-compete agreement as a condition of employment, which restricts them for the duration of their employment and two years after from working for any other business that sells "submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches." The Attorney General says under the terms of the agreement, that restriction is applied to sandwich business locations within three miles around any Jimmy John's Sandwich Shop nationwide or within two miles of any shop in a later version of the agreement.

Jimmy John's operates nearly 300 sandwich shops in Illinois.

Madigan's lawsuit alleges the agreement is illegal and unenforceable under state law. The Attorney General is seeking a judgement declaring the agreements unenforceable, void and rescinded.

Jimmy John's issued a written statement in response to the lawsuit: "We were disappointed to learn of the Illinois Attorney General's filing this afternoon. The Attorney General's Office approached us in September 2015 to discuss concerns that it had about the use of non-compete agreements in Jimmy John's stores, and we were nothing but cooperative and transparent throughout the process. Though the Attorney General never indicated to us that any worker had ever reported a concern about the agreements, we made clear to the Attorney General that we would never enforce a non-compete agreement against any hourly employee that might have signed one. We offered to have our CEO sign a declaration to that effect, and pointed the Attorney General to an April 2015 ruling dismissing a federal claim against Jimmy John's over the use of non-compete agreements, on the grounds that those agreements were not at risk of being enforced. We also told the Attorney General that the agreements had been removed from new-hire paperwork and taken out of use long before their inquiry began. When we learned that, through an administrative error, certain company stores were using outdated, pre-printed paperwork, we immediately corrected the error and voluntarily informed the Attorney General. We remain committed to resuming productive discussions with the Attorney General."