HomeBusiness

Illinois Sues Payday Lender For Forcing Employees To Sign Non-Compete Agreements

Like Tweet Pin it Share Share Email

The state of Illinois has filed a lawsuit against payday lender Check Into Cash, but not for its short-term lending practices. Instead, the company is accused of exploiting its low-wage employees by forcing them to sign non-compete agreements that restrict their ability to find jobs elsewhere.

Illinois Attorney General Lisa Madigan’s office filed a lawsuit [PDF] against Check Into Cash of Illinois — a subsidiary of the national payday lending venture — accusing the company of running afoul of state laws by imposing highly restrictive non-compete agreements on low-wage customer service employees.

According to the lawsuit, employees at Check Into Cash’s 33 Illinois locations are subject to a non-compete clause that restricts them from working for any other business that provides consumer lending services or products for one year after they leave the company.

Targeting Low-Wage Workers

The lawsuit alleges that these clauses are in violation of the Illinois Freedom to Work Act, which prohibits the use of non-compete agreements for employees earning minimum wage or less than $13/ hour.

The AG’s office contends that most of Check Into Cash’s employee make less than $13/hour, meaning they fall within the scope of the law.

Too Restrictive

Additionally, under Illinois law, non-compete agreements must be premised on a legitimate business interest and narrowly tailored in terms of time, activity, and place.

The AG’s office alleges that Check Into Cash’s non-compete clause is in violation of these requirements, as they include restrictions that cover too many different employment options and places too many limitations on the location of future employment.

For instance, consumer lending services and products can include any payday advance services; check-cashing services; pawn or title pawn services; secured or unsecured credit lending services; secured or unsecured installment lending services; or essentially any other consumer lending service or money transmission service.

The state’s lawsuit contends this is too wide-reaching, noting it could also apply to retail stores or auto dealerships that extend credit or companies like Western Union or the U.S. postal service that transmit money.

Additionally, the non-compete agreements prohibit employees from finding future employment at these types of companies if they are located within 15 miles of any office or retail location of Check Into Cash, or any location of the company’s parents, affiliates or subsidiary companies.

“Check Into Cash inappropriately tries to retain low-income workers by requiring them to sign unfair non-compete agreements that attempt to prevent workers from getting better jobs elsewhere,” Madigan said in a statement.

With the lawsuit, Madigan’s office seeks to void the non-compete clauses and prevent Check Into Cash from imposing future clauses.

Not The First

This isn’t the first time Madigan’s office has tackled unfair non-compete clauses.

In Dec. 2016, Jimmy Johns entered into a settlement with the AG’s office over the use of restricted non-compete clauses that prevented employees from working for other sandwich companies. 

Under the deal, Jimmy Johns agreed to pay $100,000 to establish education and outreach programs, putting an end to a months-old lawsuit that alleged the fast food company illegally required all employees to sign a highly restrictive non-compete agreement as a condition of employment.

The AG’s office notes that it is currently investigating other companies that have also used restrictive non-compete clauses.

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *

اخبار حلويات الاسرة طب عام طعام وشراب