If you have followed the news lately, you may have read about sandwich shop Jimmy John’s forcing its hourly employees to sign noncompetition agreements, forbidding them from working for other sandwich shops once their employment ends. As Cleveland employment lawyers, it is fairly common for people to ask us whether these types of restrictive agreements are enforceable in Ohio, and whether they are enforceable even when an employee is wrongfully terminated.
In the employment law context, noncompetition agreements are typically reserved for higher-level employees, particularly those with access to sensitive or proprietary company information. But some Ohio employers require all employees—even hourly employees—to sign them as condition of employment.
Under Ohio employment law, noncompetition agreements are generally enforceable if they are deemed reasonable. Factors considered by courts include whether the restrictions are reasonably necessary to protect the employer’s legitimate business interests, whether the restrictions would impose undue hardship on the employee, and whether the restrictions would harm the public. In most cases, however, the restrictions tend to be upheld, even if the employee was fired.
Earlier this month, reports came out that Jimmy John’s requires its sandwich makers—low-wage hourly employees—to sign noncompetition agreements. The agreements prohibit the employees from working for another sub shop within three miles of any Jimmy John’s location during their employment and for a period of two years afterwards. According to research done by the Huffington Post, if enforced, the agreements mean that Jimmy John’s employees would be “effectively be run out of Chicago, Minneapolis and Denver for the purposes of deli employment,” as well as “[l]arge swaths of other major metropolitan areas.” It certainly appears that a former Jimmy John’s employee would be prohibited from working for a sub shop in: all of Cleveland; most if not all of Akron, Medina, Elyria; and, significant portions of Lorain and Lake Counties.
It is unclear whether an Ohio court would uphold the Jimmy John’s restrictions if challenged in court, but I see a strong argument that they should not be upheld against these particular hourly employees. Without getting into detailed legal analysis, as a matter of common sense, I’m not sure the agreements pass the smell test. It is difficult to envision significant harm would befall the company if one of its former sandwich makers went to work for, say, Subway.
Fired employees with noncompetition agreements face a difficult situation: they have lost their jobs, and yet are restricted from finding new ones. Still, in some cases, there may be options that will allow the employee to limit the agreement or get out of it entirely. If you find yourself needing the advice of a Cleveland employment lawyer, you can contact us today for a free consultation.