- Poland, you can make non-compete for the time you pay full salary (e.g. if company wants you to restrict employment for 3 months after leaving it, you will get your salary during that period)
My understanding of the CA model was that they are unenforceable except for when an employee has a controlling interest in the company. For example you could enforce a non-compete on a co-owner who tried to create a competing service. At least that's the way I interpreted it.
This comes up every now and then. IANAL, but my understanding is that a California court may give effect to an order from a different state, so employers may try to get an order from out of state (a "race to the courthouse"). This is different from enforcing a non-compete from out of state, it's enforcing a ruling from a different jurisdiction.
"Non-compete agreements are automatically void as a matter of law in California, except for a small set of specific situations expressly authorized by statute. They were outlawed by the original California Civil Code in 1872."
"here are limited situations where a reasonable non-compete agreement may be valid in California.
(1)Where the owner of a business is selling the entire business, or is selling the goodwill in the business, the seller may be bound by a non-compete clause.
(2)When there is a dissolution or disassociation of a partnership.
(3)Where there is a dissolution of a limited liability company."
So #1 says "you cannot sell your business with the intention of competing in the same space after the sale". Which seems reasonable.
Realistically, these are all the same thing in different manners - dissolving a business, and starting another immediately competing in the same space, which seems shockingly sensible to me.
yeah my understanding is that it is very state-to-state - I think in TX they are unenforceable unless they are part of the sale of a business in which you are an owner and hence receive compensation as part of the sale...
Non compete clauses do not make sense for employees that are not highly compensated. They are a violation of the 13th amendment and frequently unenforceable. This doesn't stop people from trying to use them as a tool to increase employee retention especially in the face of poor work conditions and bad management. If an employer insists on one, you should ask for compensation. Make sure they agree to pay you some amount greater than your equivalent total compensation with benefits for the entire duration of the non-compete period.
One of the problems with being poor is that you might not be able to afford lawyers to contest a suit over a non-compete. Therefore, we can't rely on post hoc legal remedies. Companies need to be proactively prevented, via regulation, from trying to pull this kind of stuff.
"One of the problems with being poor is that you might not be able to afford lawyers to contest a suit over a non-compete. "
But even if you have money that doesn't mean it makes economic sense to pay for an attorney's time and file suit. Even attorneys don't file a lawsuit just because they can. Their time is worth money and there is also the opportunity cost.
Likewise it works both ways. Take a developer who doesn't complete a project yet collects $6000 from someone as a deposit. Doesn't pay to bring a lawsuit even if you can afford an attorney. [1]
[1] An actual case I was the one out the $6000 deposit. I walked away from it (and I'm glad as it would have been tons of aggravation as well as attorney fees).
Most employers don't waste time on references given the legal liabilities, references are only required as a tradition, to prove you know how to play the game, so I think they're safe... with the sole exception of the camp counselor. Given contact with kids, I'd like to at least imagine they would try to background check. Even then they probably don't and rely on 3rd party professionals.
You have to be realistic about these kind of things. If, under better economic conditions, adults would never work these jobs and it would all be "teens first job" then they're not going to be geared up to check references or prior employers and they're not going to care if you leave your previous employer section blank. You don't need a stellar resume to meet the minimum requirements to flip burgers and if you show up with a stellar resume it proves you don't know how to play the game and they will politely tell you you're overqualified, until you learn to play the game.
Looks like a pretty accurate paraphrase, except that you left out the "well meaning advice" for people very unlike the GP to take risks the GP never would so that the system can right itself. That's a real gem of anti-empathy right there.
> there are other cases where low-paid or entry-level workers have had an employer try to restrict their employability elsewhere. The Times article tells of a camp counselor and a hair stylist who faced such restrictions.
Being poor does not seem to have helped those people.
Probably something like protecting their operational advantages i.e. standardized processes found at the retail front line that give them a competitive advantage
Maybe I'm a clueless jackass, but I've made sandwiches before, and I've seen sandwiches made in sandwich shops before, and I can't imagine this "training" taking longer than a shift. The training that isn't directly related to sandwiches, e.g. how to stock the cooler and where the dumpster is located, is likely to vary from shop to shop. Most hiring shop managers are going to look more closely at how long one has held jobs than whether those jobs were with a competing sandwich chain.
I worked at a Jimmy Johns for a few months. They make the sandwiches in a very specific way to optimize for speed. The average time between order and handoff to a customer was about a minute during busy times.
I'm hoping that companies pushing non-competes to workers at this level causes some discussion around non-competes at national level. Hopefully, as a country, we will treat non-competes more like CA does.
I've been under non-competes before. I've just ignored them. Most of them are unenforceable and in cases like Jimmy John's are just another form of harassment.
Hell, many places will release you from a non-complete if it gets you to fuck off faster after being let go. Non-competes aren't really about punishing after you leave, they are there to "encourage" you to stay.
I'm not at a high enough level that I think an employer would actually try to enforce a non-compete but the fact that I signed something that says they could still scares me.
This got a little too typically NYT generic and preachy at the end -- I was expecting either an altar call or somebody to pass a collection plate -- but the specific case about non-competes deserves some attention.
For all the things California is doing to drive out businesses, one great thing about the state is that non-competes have very little weight. (In fact, this was what led Google and Apple to screw over the tech industry for many years, but I digress). The measures are very rarely enforced even in states that do support them. What with a new load of state legislators coming into office over the next few months, fixing non-competes in those other states is an easy win that could increase the state's competitiveness.
Don't get into an agreement you're not willing to enforce... lets be realistic, the victims are judgment proof, if they lose, the company might be able to repo their hat or apron, that's about it.
Most likely result is if you quit and tell your boss you're going to a competitor of any sort in the food service industry, you won't get your last pay check. It'll cost too much to get it, so corporate wide its free money for the company across the large set of all employees.
In California, there's a fairly straightforward process, assuming you go through the CA Labor Commission instead of a lawsuit. If the employer contests your claim in any way, it basically takes at bare minimum 6 weeks to complete, and often longer. A normal timeline, in a contested case, would be bare minimum 8 weeks until cash in hand. Longer timelines are typical. You may read a description here: http://www.dir.ca.gov/dlse/howtofilewageclaim.htm
California law provides for penalties payable to the employee, giving him his daily wage for each day the last payment is delayed. http://www.dir.ca.gov/dlse/faq_waitingtimepenalty.htm
It typically isn't worth trying to dick over your old employee.
I wonder if this is related to companies' refusal to hire full-time employees. If you only hire an employee for 20 hours per week, obviously they're going to need two other minimum-wage jobs... which may be at your competitors. I heard a story (which may or may not be true) about a guy who worked part time at Home Depot and part time Lowe's.
I had a 6-month non-compete-ish agreement at a taco shop in 2007. I couldn't take the taco recipes to another taco shop within the nearest `n` miles. Kinda lulzy at the time...
The article has a pretty obvious slant in one direction. A lot of times small businesses will require this of their entry level workers not because they are afraid of their workers going to a competitor, but don't want their employees to go and start a competing business, which in the small business world is a very real risk. It costs much less to start a small business, and in the local market many of these small businesses operate in, a new competitor can take away a big chunk of an already small pie. If that competitor did so by stealing your business practices, then congrats, you are putting yourself out of business. I'm not necessarily saying this is wrong or right, but it's the other side of the story the NYT didn't discuss.
Ironically, I worked for JJ in college, and never once did this ever concern me. This may be my personal bias, but I think the NYT is trying to make mountains out of molehills here. There are much bigger contributing factors to low wages for fast food restaurant workers, such as illegal immigrants depressing wages, limited ability for workers to organize, and perverse tax incentives that prevent profits from working their way down the economic ladder.
As a side note, JJ pays better than a vast majority of fast food restaurant chains. Their in-shop workers are paid above minimum wage (average around $8.50), and it's fairly easy to move into a delivery driver position where you can earn $25/hr on Fridays and Saturday nights.
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.
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.
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.
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 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.
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.
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.
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.
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?
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.
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.
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.
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."
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.
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.
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.
> 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.
> 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.
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.
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.
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 ; - )
The story from the flight attendant in your link reminds me of my time in the Army Reserves. A true cross section of humanity, from my staff sgt with a degree in philosophy and my civil engineer sgt to some total meatheads, and everything in between, in a big bell curve.
Variation in general is immensely higher in blue collar, or the pressure to aggressively conform is much higher in white collar, however you want to phrase it. Blue collar people are just people, but the white collar folks have a peculiar aspiration requiring quite a bit of faking and leads to impostor syndrome and things like that.
I'll step up to defend lotsofmangos: that's a particularly uncharitable reading of the comment.
I took it to mean "your opinion is ludicrous; a person getting paid $8.50 an hour to flip burgers or assemble sandwiches lacks the access to capital required to start a restaurant". That's absolutely correct, and not at all a direct personal attack.
(though I'd agree that the choice of "sanity" is unfortunate)
Thank you for that. I have taken a bit of a step back to have a think if I am maybe a bit too combative in my language sometimes. Personally, as someone who actually has occasional mental health issues, I think it is fine to question someone's sanity if they come out with ridiculous ideas. If we are banned from saying that someone is being crazy, then that is not going to help anyone, least of all the insane.
edit - my other comment that did get greyed out, was admittedly far more of a personal attack, which was based on me asking myself who would suggest such a thing if they were not crazy, and I decided that the best candidate was the creatures from "They Live", hence the comment about the sunglasses. This was poorly judged, though I do not know if it became greyed out due to the insulting nature, or purely because it was one comedy sci-fi reference too many.
- California, non-competes are not enforceable
- Poland, you can make non-compete for the time you pay full salary (e.g. if company wants you to restrict employment for 3 months after leaving it, you will get your salary during that period)