New York Attorney General Helps Those Who Can’t Help Themselves
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Too often those who lack sufficient economic leverage must abide by the decisions of others even when the result is manifestly unjust. But sometimes a lawyer is there to help. New York’s Attorney General recently used the power of his office to help a couple of disparate groups affected by the arbitrary decisions of their respective employers.
In the span of two weeks, New York AG Eric Schneiderman convinced two sizeable companies to abandon a requirement that new employees sign non-compete agreements preventing them from going to work for competing businesses. While non-competes are not inherently illegal, the circumstances in each case raised eyebrows because of the overly drastic consequences involved.
First was Jimmy John’s, the ubiquitous sandwich shop that you can see in nearly every commercial break during any live sporting event. Under the sample non-compete agreements sent to potential franchisees, Jimmy John’s prohibited entry-level sandwich makers who left the company from working anywhere within a two-mile radius of a Jimmy John’s location if the new employer derived more than 10 percent of its revenue from sandwiches. The AG called the non-competes unlawful since New York law only allows such agreements if a worker has unique skills or possesses trade secrets. Although Jimmy John’s brands itself as a “gourmet” sandwich shop, it’s pretty clear that there’s no unique skill or trade secret in making a sandwich for anyone who’s ever eaten one.
Next in line was legal publisher Law360, which has employees nationwide. Under the Law360 non-compete agreements, entry-level reporters were barred from working for other legal publications for one year. The NY AG began to focus on the company after a story went viral about a reporter who was fired weeks after accepting a new job because Law360 notified her new employer about a non-compete agreement she had signed two years earlier. In addition to abandoning new non-compete agreements, Law360 also agreed to release anyone from such agreements that were signed in the past year.
While non-competes are important tools in today’s business world in the right circumstances, they have traditionally been used when carefully tailored to a legitimate threat to a company’s trade secrets or technological advantage. How sandwiches are made or how reporters do their jobs is not exactly a lucrative mystery, and using this weapon against young and relatively powerless employees seems more like a punitive measure than a valid business interest. Kudos to Attorney General Schneiderman for using his power and his office to protect these unfortunate victims.
Posted: 7/14/2016 9:40:32 AM by
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Thanks for stopping by On the Merits, the first blog from the Texas Center for Legal Ethics. On the Merits will take a close look at significant legal stories with an eye toward addressing the legal myths and misconceptions that turn up in news stories, movies, TV programs, websites, anonymous emails and other forms of mass communications. Our goal at On the Merits is to provide readers with a thoughtful examination of what the media and others are saying about the legal profession and to apply the frequently-absent context of how the legal system actually works.
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