Low-Wage Worker Noncompetes? Can You Say Antitrust?

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Feb. 23, 2013 - Minneapolis, MN, U.S. - Jimmy John's Signage. ] TOM WALLACE ¥ twallace@startribune.com _ Assignments #2002778

The press has been all aflutter about the news that Jimmy John's sandwich shops make their employees sign a 2-year noncompete agreement saying:

Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after ... he or she will not have any direct or indirect interest in or perform services for ... any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John's location in question] or any such other Jimmy John's Sandwich Shop.

Since Jimmy John's is a nationwide chain, that means their sandwich makers can't make sandwiches anywhere in America for 2 years after they leave. Oppressive? Heck yes. Legal? Heck no.While noncompete laws vary from state to state, every single state requires that a noncompete agreement be supported by a legitimate interest other than preventing competition. Why? Because an agreement for the purpose of preventing competition violates antitrust laws. What does that mean? Basically, because we're a country based on capitalism and competition, we have passed laws saying corporations can't agree not to compete with each other or engage in anti-competitive activities.

While a sandwich maker who has a secret sauce or bread recipe could well be limited from using that recipe elsewhere, they can't be legally barred from slapping meat between two pieces of bread. A legitimate interest could be something like trade secrets or expensive training, but it seems unlikely that there are any trade secrets or training beyond what is normal in the industry involved here.

The problem with this is that most employees can't afford to fight a noncompete. Some states, like my home state of Florida, allow employers to say, "sign or be fired." Then unscrupulous employers will use the noncompete agreement as a weapon. The employee is trapped, so they're scared that if they try to unionize, object to discrimination or sexual harassment, or ask for a raise, they'll be fired.

And yes, it's pure myth that your employer can't enforce the noncompete if you're fired. Some states require that the employer pay the employee's salary for the length of the noncompete period if the employee is fired without cause, but many don't have any such requirement.

I've seen noncompete agreements imposed on copy room employees and other low level employees who had zero trade secrets. These agreements are used to intimidate employees and to scare them into staying in horrible job situations.

It's time to fight back. Will the Federal Trade Commission or the U.S. Attorney's office step in and enforce the antitrust laws against these unscrupulous employers? Let's find out. If you are an employee who thinks your noncompete agreement isn't supported by any legitimate interest, or if you know one of these employees who is too afraid to speak up, tell the government about it. You can reach the Federal Trade Commission by emailing them at antitrust@ftc.gov. The United States Department Of Justice's Antitrust Division can be reached at antitrust.complaints@usdoj.gov. DOJ has pursued large tech companies that entered into anti-poaching agreements saying they wouldn't hire each other's employees. Will they be interested in helping the little guy or are they only interested in going after the big fish?

If you file a complaint with either of these agencies, let me know what happens. I'll be glad to report it here.

If you need legal advice, it's best to talk to an employment lawyer in your state, but if you have general legal issues you want me to discuss publicly here, whether about discrimination, working conditions, employment contracts, medical leave, or other employment law issues, you can ask me at AOL Jobs.

Please note: Anything you write to me may be featured in one of my columns. I won't be able to respond individually to questions.
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