Changing Jobs ‘Freaky Fast': Seven Ways Companies Need to Learn to Let Go

If the guy who makes your sandwich at Jimmy John’s can land a better job, should he be able to make the switch “freaky fast?”

Illinois Attorney General Lisa Madigan thinks so. Last week she sued the sandwich company for requiring its employees to sign a non-competition agreement that restricts them for two years from taking any job within two miles of a Jimmy John’s at a company that gets more than a tenth of its sales from sandwiches.

“Preventing employees from seeking employment with a competitor is unfair to Illinois workers and bad for Illinois businesses,” the official said in a statement released with the lawsuit. “By locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits”

The Illinois legal action is just the latest assault on non-competition clauses. Increasingly, Congress, state legislatures, and judges are scrutinizing “non-competes.” Last month, the White House weighed in against them.

Some companies, like Jimmy John’s, have gone too far, dropping boilerplate language on employees either without much thought for their fairness or finding it convenient to make leaving and pushing for higher pay more difficult. Non-competes are sometimes made a non-negotiable with camp counselors, lifeguards, yoga instructors, pet sitters, and – until the company dropped the requirement when it went public – Amazon warehouse workers.

The blowback from this overreaching may take with it a company’s ability to have reasonable non-competes with its truly important employees. Without reform, these agreements across much or all of the country will become what they already are in California, Oklahoma, and North Dakota – dead on arrival.

Some employers are going to have to learn to let go.

My recommended seven key reforms needed to preserve non-competes for truly important employees are in my latest Forbes column.