Jimmy John's Class-Action Suit Over OT Can Wage On: Appeals Court

CHICAGO, IL — A Chicago appeals court ruled Thursday that Jimmy John's assistant managers can sue the sandwich shop chain's corporate owner, as well as individual franchisees, for not paying those employees overtime, according to The Indiana Lawyer. An Illinois district court had previously ruled that the workers could not sue franchisees in class-action litigation against the Champaign-based company, but the 7th Circuit Court of Appeals' decision drops that restriction, the report added.

In reversing the original decision, the appeals court judges said the district court judge overstepped when he blocked plaintiffs from suing franchisees, the report stated. The class-action suit, which combines suits from Illinois and Ohio, claims Jimmy John's improperly classified assistant managers as employees unable to receive overtime, the report added.

"Too often, companies intentionally misclassify workers in an effort to mask what is essentially wage theft, " said Seth Lesser, the lawyer for the lead plaintiffs, said in a statement to Crain's Chicago Business. "This ruling is an important step towards righting those wrongs."

Overall, the assistant managers are asking for back overtime wages and other damages in the lawsuit, The Indiana Lawyer reports.

Jimmy John's was founded in 1983 by Arlington Heights native Jimmy John Liautaud when his dad gave him an ultimatum upon graduating second to last in his class at Elgin Academy: start a business or start marching and join the military. With a $25,000 loan from his dad, Liautaud — currently the company's board chairman and largest individual shareholder — opened his first location in Charleston in southeastern Illinois.

The company began franchising in 1993 — its first such location opening in Eau Claire, Wisconsin — and currently, 98 percent of its locations are franchisee-owned. In 2016, the chain was ranked first on Entrepreneuer magazine's Franchise 500 list (it was No. 5 on this year's list).

Jimmy John's earns more than $2 billion annually from its more than 2,60o restaurants across the country, according to Crain's. A representative for Jimmy John's did not respond to Crain's request for comments about the appeals court's decision.

More via The Indiana Lawyer and Crain's Chicago Business

Image via Jimmy John's