Jimmy John’s No-Poaching Clause Referenced in Antitrust Lawsuits

The presence of a Jimmy John’s no-poaching clause has become the subject of lawsuits from employees who say that they did not know that they were being blocked from upward career mobility by agreements between their employers and the parent company.

No-poaching clauses are essentially an agreement between franchisors and franchisees not to hire employees who worked at another fast food location under the same brand. In July, Jimmy John’s reportedly agreed to remove its no-poaching clause. However, it is still currently facing an antitrust class action lawsuit.

The Jimmy John’s no-poaching clause is referenced in a class action employee lawsuit concerning no-hire agreements and non-solicitation agreements between various franchisees.

Employees allege they did not know when they were hired that their franchise owner or boss would have signed an agreement with a Jimmy John’s no-poaching clause. The clause means that if the employee moved and tried to work at a new location they could have been denied under the terms of the clause signed between franchise owners.

There are more than 2,700 Jimmy John’s locations across 40 states in the District of Columbia.

This lawsuit alleges that the Jimmy John’s no-poaching clause negatively impacted thousands of employees. Since nearly all of Jimmy John’s restaurants are owned independently and operated as franchises distinct from the corporate entity, employees could have been subject to limited employment opportunities due to the presence of a Jimmy John’s no-poaching clause.

The plaintiff in one of the Jimmy John’s no-poaching clause lawsuits says he was employed part-time at the company, working as an in-store employee and a delivery driver. He alleges he quit his job in January 2017 after the supervising manager dropped his hours to just four per week.

A Jimmy John’s no-poaching clause lawsuit claims the chain is in violation of Illinois law and the federal Sherman Antitrust Act.

According to that Jimmy John’s no-poaching clause lawsuit, franchisees who executed their franchise agreements between 2016 until the removal of the no-poaching clause in mid-2018, agreed not to initiation or solicit recruitment of any person who had been employed in the previous 12 months by Jimmy John’s, another Jimmy John’s restaurant franchisee or any of Jimmy John’s affiliates.

In accepting these terms, a franchisee had to recognize that violation of the recruitment and employee solicitation restrictions was grounds for Jimmy John’s to terminate the franchise. Employees say that this forced agreement limited their rights and ability to earn higher wages.

The franchise might also have been obligated to pay liquidated damages within 15 days after being terminated if they were found to violate the Jimmy John’s no-poaching clause. The presence of these no-poaching clause agreements, including the Jimmy John’s no-poaching clause, could harm employees who did not realize that the agreements existed but who tried to transfer from one location to another without success.

If you suspect you were subject to the Jimmy John’s no-poaching clause and you think it limited your employment mobility and wages, you can talk with an attorney about your legal options.

Join a Free Fast Food Employee Poaching Class Action Lawsuit Investigation

If you work for McDonald’s, Jimmy John’s, Pizza Hut, Little Caesars, Papa John’s, Domino’s, Burger King or Arby’s and were prevented from moving to a different franchise that is part of the same company, you may have been the victim of a no-poach agreement. If so, you may qualify to participate in this employee poaching class action lawsuit investigation.

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