Your company may have non-compete clauses, and in some cases, I support those. After all, you don't want your top widget salesman to leave today and go to the competitor widget maker and take all your clients with him, but what about the guy that makes your sandwiches? Should he have a non-compete clause in his contract?
The Huffington Post reports that sandwich restaurant Jimmy John's makes their entry level people sign a non-compete agreement that is surprisingly broad. It's not just that employees can't walk directly across the street and accept a job from Subway, they are limited for two years from working for any restaurant that derives 10 percent or more of their revenue from sandwiches or similar, if that restaurant is within a 3 mile radius of a Jimmy John's. As article author Dave Jamieson says, "It isn't clear what sort of trade secrets a low-wage sandwich artist might be privy to that would warrant such a contract. A Jimmy John's spokeswoman said the company wouldn't comment."
Exerting control, because it can
As a former fast food worker (although, admittedly, I've never set foot in a Jimmy John's), I can tell you there are no critical secrets held by the 16-year-old who is slapping your sandwich together. This is strictly a case of a company doing something because they can.
"Because we can," should not be a governing principal in managing a business. You can do a lot of things that you should not. You can, for instance, scream at your employees. You can (in many states) require people to work without a lunch break. You can hire only people who will suck up to you. These things are legal and stupid. But, this non-compete goes beyond legal and stupid to legal, stupid, and mean.
While there have been no known instances of attempted enforcement, according to the Huffington Post, the fact that the clause exists means they could attempt to enforce it. Since these are low-level jobs, it's doubtful that the former employee would have the means to fight it, and unless the person is making a huge jump from part-time delivery driver to Sr. VP at another sandwich restaurant, the new company won't pay the legal bills either. Seriously, can you imagine walking into another sandwich chain and saying, "I'd like a job, but I have a non-compete. Will you hire me and pay legal bills if Jimmy John's sues?" They would laugh you out of the room.
No, this clause only exists to exert control over an entry-level worker who is either not sophisticated enough to understand what they are signing (I know, when I worked fast food, I wouldn't have understood the legal implications of that), or is desperate enough for a job that they are willing to sell his soul for the privilege.
Now, as a practical matter, these non-compete restrictions may not be enforceable at all in many jurisdictions. Employment Lawyer Eric Meyer points out that their usually needs to be a business reason to enforce such a clause. I'm hard pressed to think of one where Jimmy John's can show that having their former driver working in a college cafeteria (that sells sandwiches) is damaging to their business. However, the reality is, while Mr. Meyer and I know this from years of working with employment law (and Mr. Meyer is far more qualified than I am, as he's an actual lawyer), your average entry level sandwich maker isn't up on employment law. Therefore, if the employee understood what he signed, he'll believe that he can't accept a job that violates that. The end result is that Jimmy John's doesn't even need to demonstrate business need in order to control low-level employees' lives for two years.
Non-compete clauses should be used sparingly, and then only to protect actual business interests. It shouldn't be done on the theory that some day, somewhere, someone might steal your secret that how you make sandwiches is to put meat, cheese, vegetables and sauce between pieces of bread.