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I am confused by what appears to be an assertion that Jimmy John's has a legitimate concern that their minimum-wage-earning food service employees might leave to start a competing national sandwich chain.

Devil's Advocate:

It's certain that Jimmy John's line-worker can't start a 2,000 store chain, but they could run off with some of the catering business.

Jimmy John's competes with every local restaurant in every local market where it operates. Someone can easily start a local business that cuts into the market share of one of its local stores, although yes, it's very unlikely that restaurant is going to overtake Jimmy John's nationally. And yes, many local businesses, especially restaurant businesses, are started by former employees who enter a field to get training, but one day want to open their own business. It's obvious many of the comments (and my downvotes) here are from individuals who have never ran, nor worked in, a business that operates and competes on a local scale.

I didn't up or downvote you but from my perspective I don't feel that employers deserve more protections. If I want to run off with the secret recipe it's already protected by IP laws. I think it should be illegal for an employer to limit your future employment in any way. I'm not saying the restaurant industry isn't competitive, it's probably one of the most competitive I can think of, but limiting employees rights is not the right way to handle that.

At JJ, it was more about operational secrets that can't be protected by law. However, I mentioned in my original post that I don't necessarily think it's right or wrong, it's just why JJ does it.

I generally agree with you that limiting future employment is generally not a good thing, although I'm not convinced getting rid of non-competes in minimum wage jobs would materially affect wages. At most, it might prevent someone from taking a manager position at Subway, but I don't think it is going to raise the overall wages of restaurant workers.

Jimmy Johns is a franchise operation with tens of thousands of employees. Their retail workers do not have access to meaningful "operational secrets". It wouldn't matter if they did, either: trade secrets can be protected directly without noncompetes.

I work in a fiercely competitive space in which the modal vector for company formation is employees of competing companies leaving to start them.

The idea that Jimmy Johns could expect the right to bind minimum-wage-earning food service workers with a noncompete is verkakte. Even in circumstances where employees are given access to trade secrets and client rolodexes, noncompete agreements are difficult to enforce and almost invariably slashed to bits by courts when they survive at all.

Obviously, Jimmy Johns will not prevail in enforcing a noncompete on a minimum-wage employee. What they're doing is simply intimidating their own workers, probably based on some simple calculation about the impact their bogus noncompete will have on employee turnover, which is a metric every at-scale retail business optimizes for.

It is easy to devise logically-consistent reasons Jimmy Johns would want to bind their employees with anti-competitive contracts. Such arguments more or less beg the question.

If Jimmy John's can't compete with a fly-by-night catering business started by a former worker, then why shouldn't Jimmy John's fail?

I can clear up your confusion, but I warn you, it isn't pretty. Quick, put on these sunglasses and look at bsbechtel again. Just don't stare too long.

Of course the vast majority of them are no threat, but you should not assume every fast food employee is in it for the pay. If you are committed to opening a hamburger shop, you go and get a job at a hamburger shop for a few months to get some experience, see how they operate, maybe even pick up some ideas in terms of recipes, though usually its more learning the operations rather than stealing recipes. I know for a fact that this is a real thing because I know people who have done it in the taco truck business. If you are opening a hamburger shop without significant hamburger shop experience and you don't do this, you are a moron.

Doesn't mean blanket non-compete is fair, but to completely dismiss the OPs point it at best naive.

Once again: this isn't an argument. Taco truck owners could also rationally want to demand that their employees work for Taco Bux instead of dollars. But they can't, because neither the law nor human decency recognizes the validity of that exchange. And so too it is with noncompetes. The relationship a Jimmy Johns retail employee has with their company will inevitably fail to satisfy the requirements for an enforceable noncompete. In particular: minimum- and near-minimum- wage employees by definition haven't been given consideration in exchange for agreeing not to compete, and have neither privileged access to a rolodex of customers nor access to trade secrets.

My opinion is that Jimmy Johns is in fact not concerned that their employes will start competing firms. Rather, they'd like to minimize employee turnover, which, unlike local sandwich business starts, is a metric they actually probably do track. And one vehicle they've found for minimizing turnover is in tricking their employees into believing they have fewer alternative jobs available than they actually do.

There are different issues being mixed up here: the fairness of the policy, the enforcibility of the policy and the motivation of the policy. I am only speaking to the motivation of the policy. Obviously we are just trying to read minds here since neither of us has any evidence of what went into their decision-making process. I am simply telling you from my first-hand knowledge in this industry, that 1) infiltration by potential competitors is common 2) it is a real concern 3) a non-compete provides some mitigation in terms discouraging the practice and providing a possible avenue of enforcement (though it might not actually be enforceable)

The blanket way OP has been dismissed really has to do with the rustled jimmies about the fairness of the policy and does not reflect well on the quality of the replies.

That's evasive. We have good reason to discount the idea that Jimmy Johns is seriously motivated by concerns about competing with sandwich chains started by their employees, and among them is the fact that they don't satisfy the requirements for enforcing those noncompetes, which their numerous attorneys have doubtlessly told them.

They have then doubtlessly been told that they are unenforceable again Joe Employee who wants to work at Subway, but you seem to think that they still do it to trick people from leaving to work at subway. Why don't you think it's useful to discourage people potential competitors from infiltrating their company? I'd bet you it's way more likely to be enforceable in the latter case, against someone looking to copy your operations, if it's enforceable at all.

Because the bogus non-compete will fool Joe Employee but not Joe Next-Captain-of-Industry.

You should familiarize yourself with the story of Homejoy. The founders did pretty much exactly what we are describing as a potential threat here in order to gain experience in the cleaning world.

The argument that asking employees to sign a non-compete is somehow unethical, yet getting a low-wage job to learn how to run a competing business is not unethical is moot and completely subjective.

Let's not fool ourselves. A minimum-wage worker has hardly the resources, knowledge, and time to start a business. Are the non-competes coming from the corporate arm (who potentially has a secret formula to lose, but again lets not kid ourselves), or is the non-compete coming from the local franchise owner?

The more likely reason is because JJ's and/or the franchisee know that their line workers can and frequently do hop jobs over small things like consistency of hours, a manager they don't get along with, or a $0.25 increase in pay. Lost manpower and retraining hurts the store's bottom line.

I was just in a Chipotle last night, standing behind a Starbucks worker taking a break from the shop next door. The SBux worker and the Chipotle line staff instantly started an exchange over who they knew was hiring, what the conditions were like at their respective stores, and what the pay was. Everyone keeps their ear to the ground these days.

Absolutely. I'm sure the noncompete is the only thing saving JJ's from having their secret sandwich formula stolen by the kid they pay $8/hr. If not for that NCA she'd probably cross the street and open her own "2,000-location sandwich chain" & put JJ's out of business. Thank goodness for this wholly appropriate, not at all exploitative use of NC agreements and darn that socialist newspaper!!

> I'm not necessarily saying this is wrong or right, but it's the other side of the story the NYT didn't discuss.

Probably because it's a really dumb side to the story?

An individual Jimmy Johns franchise has to worry about one of their sandwich assemblers starting their own deli as much as I have to worry about catching ebola.

"It costs much less to start a small business"

Ok, I'll bite. In what way does starting a small business "cost less"? Less than what? Have you ever tried to get a loan to start a retail restaurant? It's incredibly difficult to get the funding necessary, especially in an industry with such low margins.

Retail fast food restaurant - <$50,000 A food truck - <$20,000 Home-based service business - <$5,000

All these businesses can be started with either 1) personal savings, 2) a family and friends loan, or 3) credit cards. They all also have the advantage of generating cash from day 1, vs a tech startup which can have substantial development time.

You're very out of touch with the life of a minimum wage worker. I'm not sure what I can do to fix that, but maybe just step back and think about who you're defending and why.

What do you do for a living? I run a business that competes with fast food franchises for low wage labor. A great majority of our employees aren't poor, or struggling to get by, but college kids who are looking to make a little extra cash and get some work experience. A small handful are children of parents who have millions in the bank, and have no need to work other than it's something to do, and maybe to gain some necessary life skills. A number of them also wish to start their own small business one day (I always ask, because I would rather convince the ones who do to start a franchise for us). We have them sign a non-compete because a large portion of our competitive edge comes from operational efficiencies that our competitors can't touch, but aren't necessarily exclusive or proprietary. We also tripled in growth in the past year, and pay our employees higher wages than virtually any alternative job they could acquire elsewhere. The risk that one of these employees would try to start a competing business is very real, and someone who is resourceful enough to do so is also probably resourceful enough to pose a significant threat to our business. Yes, many of the employees we hire probably won't ever try to do this, with or without the non-compete, but all it takes is one employee who wishes to do so and has the financial backing to make it happen to significantly hurt our business.

I appreciate your judgement on my knowledge of the life of a minimum wage worker. Yes, there are many who are struggling to get by, this is a very real problem that needs to be fixed. However, generalizing the skill set and struggles of a few to an entire wage class of labor is absurd. You're talking about millions of individuals in just as many different live situations across thousands of local markets. I would advise you to rethink your assessment of the life of a minimum wage worker. You might want to add a little complexity and depth to your profile of the minimum wage worker.

That is an interesting anecdote about hiring trust fund babies on Manhattan Island or the equivalent on the west coast, but the fraction of the population operating under similar circumstances is extremely small and thus not very applicable to a nationwide discussion.

We're based in the Midwest. Believe it or not, there are rich people here too.

> A great majority of our employees aren't poor, or struggling to get by, but college kids who are looking to make a little extra cash and get some work experience.

http://thinkprogress.org/economy/2013/08/08/2433601/fast-foo...

> However, generalizing the skill set and struggles of a few to an entire wage class of labor is absurd

You mean like you did earlier in your post? I backed my claims up with data, you backed yours up with an anecdote about trust fund babies and college kids.

I acknowledged (in my earlier post) that a vast majority of minimum wage workers do struggle. I was pointing out that the risk lies in the outliers, not those who fall into the average. If there was a very real risk that every single one of our employees could start a competing business, then we wouldn't be in business. It just wouldn't be feasible.

I also never mentioned this practice was right or wrong, I just stated there is another side to this argument that the NYT is not sharing, and they did so in a biased way.

If one of your employees can quit and start a business that threatens yours, then why should you continue to remain in business?

Why do you think that Jimmy Johns is concerned with the life of an average minimum wage worker? Perhaps they are concerned with the outliers and are happy to saddle the average workers with a non-compete just the same. The lack of insight in this thread is shocking. No one said the policy is fair or justified. The point is to think through why they might have the policy in the first place and people seem to be too outraged to do that. It's disappointing, really.

Yes, I'm sure there are just TONS of barely-higher-paid-than-minimum-wage workers out there with an extra $5,000 just sitting around.

Idiot.

So your hypothetical minimum wage worker is going to start a retail restaurant that costs typically $350,000 - $500,000 to open?

"A 2009 survey by "Restaurant Startup and Growth Magazine" found that the average owner spent $451,966 to get his restaurant up and running -- not including the acquisition of real estate. With a land purchase, the average total cost went to just over $700,00. Even those with starting costs in the lowest quartile of respondents spent $125,000."

http://smallbusiness.chron.com/startup-cost-opening-restaura...

That $50k is about three years worth of the $8.50 salary you cite. They're not going to have it in savings, no bank will give them that much credit, and your friends/family tend to be in the same socioeconomic situation as you.

The real threat is not that fast-food worked gets job at Jimmy Johns, decides sandwich business is great, decides to open competitor.

The threat is potential competitor decides he want to open sandwich shop. Already has the capital in place, doesn't have the experience. Decided to get a job at Jimmy Johns to learn how they operate. I have no idea why people dismiss this like it's crazy. If you were already set on opening a hamburger shop/chain, you wouldn't stand a couple of months at minimum wage at McDonalds to see how a successful McDonalds franchise operates?

Who are these people who didn't already have this experience as teenagers? Who are these people who can't figure out basic, logical layout and workflow?

I think most people didn't have experience with any specific industry as teenagers, even if it may be the case that most people took some similar sort of job as teenagers.

Why is this protected information? If me and three friends were going to start a burger shop, why is it even unethical for each of us to go work a few months at a burger shop and then start the new shop? This is hardly trade secret information.

It's probably not, unless you copy very specific things, which is possibly why they seek to discourage it contractually.

I'm amused at all of these Free Market worshipers who always seem to be praying to the Invisible Hand...except when it comes to competition.

If JJ can't compete with businesses that their former employees start, then why should JJ continue to exist?

If you think a contract keeping a fast food worker from working for another fast food chain for a year is reasonable, you're a tool. Hell, a side benefit for many (most?) of the posters on this site is CA doesn't allow this for software engineers, who make a hell of a lot more money and have far more insight into a business than someone making a sandwich. (What's the proprietary business practice -- fucking toasting the bread?) I'd recommend discovering why you think shitting down is a valid way to treat people less fortunate than you in life.

Yes, competition is a real risk in starting a business - welcome to the free market! Unless, of course, you're a JJ's employee that has signed a non-compete ; - )

That's assuming there are innovative ways to run a fucking sandwich shop.