Monthly Archive: October 2014

Non Compete Agreement Required by Jimmy John’s Sandwich

This if from SLATE, the online magazine.

Jimmy John’s must think it knows an awful lot about the art of the sandwich, because it’s doing its utmost to keep employees from taking their sandwich-making skills elsewhere. According to a noncompete clause the Huffington Post dug up, Jimmy John’s makes low-wage employees such as sandwich-makers and delivery drivers agree not to work for competing establishments for two years after leaving the company. Noncompetes tend to be used with managers or high-ranking employees with inside information about the business, but it’s not even the strangest part of this situation. The strangest part would be Jimmy John’s definition of a competitor.

According to the noncompete clause, employees must agree that for two years after leaving Jimmy John’s, they will “not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located within three (3) miles of either [their current place of employment] or any such other Jimmy John’s Sandwich Shop.” The clause, which has come up because of a lawsuit filed against Jimmy John’s this summer, has drawn criticism from employees for being broad and “oppressive.” Kathleen Chavez, the lawyer representing employees in the case, told HuffPo that the terms of the noncompete would prevent a former Jimmy John’s employee from working in 6,000 square miles in 44 states and Washington, D.C.

Rules on noncompete agreements vary by state, but generally such clauses are considered enforceable only when they are appropriately narrow and designed to protect a legitimate business interest. California, which is particularly in favor of competition and the employee’s right to change jobs, has a blanket rule that noncompetes are unenforceable. Since Jimmy John’s clause is so broad and seems to have little or no vital business justification behind it (what state secrets do those sandwiches contain?), it’s likely to be considered unenforceable pretty much anywhere. That said, an unenforceable clause is still problematic if it’s scaring employees who don’t know any better into thinking they can’t work at another sandwich shop—or another restaurant of any sort with a trade in sandwiches—for the next two years.
Alison Griswold is a Slate staff writer covering business and economics.

Supreme Court Employment Law Cases 2014-15

This is reprinted Oct 8, from MSNBC.com.  It is a list of Employment Law Cases to be heard by the US Supreme Court through Jun 2015.

On Wednesday morning, oral arguments began in the first of several major labor law cases the Supreme Court will take up this session. At dispute in Integrity Staffing Solutions, Inc. v. Busk, is a relatively arcane question about U.S. overtime compensation laws: When retail or warehouse employees go through security checks at the end of the day, are they still on the clock? Should they be paid overtime for standing in line and waiting to be screened?

It may sound like a minor point, but the court’s decision could send a shock wave through the American retail industry. If the nine justices rule that waiting for and receiving mandated security checks can be considered an integral part of a worker’s job, it will open the door for major class action lawsuits against some of America’s biggest retailers. Suits against Amazon, CVS and Apple are already on hold pending the Supreme Court’s ruling.

“I think it’s one of the most under-appreciated cases of the term, because it’s so arcane and technical that people don’t understand the dollars and cents that are involved,” said Marquette University labor law professor Paul Secunda. “We’re literally talking about billions of dollars here, because so many employers require their employees to go through some kind of security screening.”

Integrity Staffing Solutions, Inc. v. Busk concerns just one of those companies: A Nevada-based contractor that handles warehouse storage and logistics for Amazon.com. According to Jesse Busk and Laurie Castro, the two former Integrity Staffing employees named as plaintiffs in the original suit, workers at their warehouse were often required to stand in line for as much as 25 minutes after the official end of the work day, waiting for security to ensure they had not stolen anything. A brief filed by their attorneys says they were also required to empty out their pockets and pass through metal detectors in a process not unlike going through airport security.

A Nevada district court ruled that Busk and Castro were not entitled to overtime for the time they lost to the security check, but they won a reversal of that decision from the 9th Circuit. Then, last October, attorneys for Integrity Staffing petitioned the Supreme Court to give the case another look. Workers can’t demand overtime for time spent in security screenings, the attorneys argue, because passing through those screenings does not qualify as a compensable activity.

Integrity Staffing’s attorneys – one of whom is Paul Clement, the United States Solicitor General under President George W. Bush – argue that going through security screenings does not mean the standard test for whether a workplace activity is deserving of compensation: In the 1956 case Steiner v. Mitchell, the Supreme Court ruled that workers must only be paid for those activities which are an “integral and indispensable part of the principal activities for which covered workmen are employed.” The time spent passing through security checks is equivalent to the time they spend eating lunch or commuting to work, they argued: A task the employees might need to perform in order to do their job, but not one that’s actually central to the central to why the company employs them.

The 9th Circuit rejected this line of reasoning and sided with the plaintiffs because, it reasoned, the process of going through security checks is “integral and indispensable.” The essential work of the warehouse employees is ensuring that products ordered on Amazon.com get properly stored and shipped to their owners without becoming damaged or going missing; hence the 9th Court ruled that “the security clearances are necessary to the employees’ primary work as warehouse employees and done for Integrity’s benefit.”

“I think the issue is simple: When an employer tells you to do something, it’s work, and you ought to get compensated for it,” said Mark Thierman, an attorney representing Busk and Castro in both the Supreme Court case and their pending class action suit against Amazon. “Unless there’s a specific carve-out. There are some carve-outs for traveling, commuter time, and some other carve-outs for quasi-voluntary activities.”

Attorneys representing Integrity Staffing did not return a request for comment, but a spokesperson for Amazon reached out to msnbc to comment on the allegations that security checks tend to take nearly a half hour.

“We have a longstanding practice of not commenting on pending litigation, but data shows that employees walk through post shift security screening with little or no wait,” wrote Amazon spokesperson Kelly Cheeseman in an emailed statement.

The case has mobilized other interested parties on both sides. The industry group National Retail Federation (NRF) and the United States federal government have both filed amicus briefs siding with Integrity Staffing; two months ago, the labor coalition AFL-CIO filed a brief of its own supporting Busk and Castro.

Here is a link:

http://www.msnbc.com/msnbc/supreme-court-case-overtime