A few months ago, this blog noted that there was press coverage about the nationwide increase in the use of noncompete agreements in various industries. A story that has made the rounds in the past week illustrates this point clearly. Jimmy Johns, a “gourmet sandwich” franchise, has apparently been inserting noncompete provisions in its employment agreements, including those employees who work on the line making sandwiches. The noncompete provision purportedly seeks to prevent employees from working for a competitor, such as Subway, for a two year period. The news reports caution that there have been no reported cases so far where Jimmy Johns has sought to enforce this noncompete restriction against a former employee.
For those California employers wishing to follow in Jimmy Johns’ footsteps, you should know that California law frowns upon such restrictions and they are permitted only in certain limited cases, primarily involving the sale of a business. A noncompete provision similar to those described as being inserted into Jimmy Johns’ employee agreements would almost certainly be held unenforceable by a California Court.
For more details concerning this issue, please see “When the Guy Making Your Sandwich Has a Noncompete Clause,” published in the New York Times on October 14, 2014.