BHL Bogen

BHL Bogen
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Monday, December 08, 2014

Jimmy John's "Oppressive" Non-compete Agreement

Early this summer Jimmy John's was named as the defendant in two class action lawsuits accusing the company of wage theft practices. Specifically, the complaints allege that Jimmy John's has "intentionally and repeatedly misrepresented the true time worked by their employees" to keep costs low and dodge overtime laws. Two former employees stated that Jimmy John's managers frequently clock-out employees at the end of the day regardless of whether they have completed their closing duties. This practice is exacerbated by the fact that managers' bonuses are directly tied to whether they hit their labor cost targets.
Last month, one of the complaints was amended to include the non-compete agreement that most Jimmy John's employees sign. The amended complaint asserts that the non-compete agreement is overly broad and oppressive. In part the agreement states:

Employee covenants and agrees that during his or her employment with the Employer and for a period of two (2) years after . . . he or she will not have any direct or indirect interest in or perform services for . . . any business which derives more than ten percent (10%) of its revenues from selling submarine, hero-style, deli-style, pita and/or wrapped or rolled sandwiches and which is located within three (3) miles of either [the Jimmy John's location in question] or any such other Jimmy John's Sandwich Shop.

Kathleen Chavez, the attorney handling the case, stated that her two clients were required as a condition of their employment to sign the aforementioned non-compete covenant. She further indicated that, if enforceable, the covenant would effectively cover an area of roughly 6,000 square miles in 44 states and the District of Columbia.  

The covenant is allegedly a part of the standard employment package provided by the Jimmy John's corporate office. The decision to require individuals to sign the agreement as a condition of their employment is said to be within the discretion of the individual franchisees. Since the news of the pending lawsuits, many shop owners have pulled the covenant from the hiring package. Additionally, as of now there is no indication that Jimmy John's has ever tried to enforce the language of the non-compete covenant.

There's No Such Thing As A Free College Education

In 2006, Germany opted to lift a universal ban on college tuition and fees, which lead to the charging of tuition in seven states. However, this ban was short lived and was recently repealed in Lower Saxony, Germany, reverting back to the pre-2006 tuition and fee free university model. German political figures in support of the tuition free system referred to charging tuition as "socially unjust."

But what does this really mean for college students? Is there really such thing as a free college education? According to economists, the free college education system now in place in Germany will actually cost college students, and German citizens for that matter, more in the long run.

It comes as no surprise that even though German colleges are tuition free there is still a significant cost in keeping their doors open to students. So how does the tuition free system make up for the lost revenue? Like many colleges and universities around the world, German universities rely heavily on government subsides to make up for the revenue. However, with the newly revived tuition free system, German universities will be entirely dependent on government funding. This increased governmental expenditure will inevitably lead to higher income tax rates. According to the Organization of Economic Co-operation and Development (OECD) Germany already imposes the second highest income tax burden of the 34 OECD countries. In 2012 the tax burden placed on German citizens was a staggering 49.8 percent, which is sure to increase.

Not only will German citizens feel the increased weight of funding the universities through their taxes, but what economists are calling a "Moral Hazard" will likely also increase the average cost per students to obtain a degree. This "Moral Hazard" arises when students are relieved of the financial burden and realities realized through paying for one's tuition. By absorbing the financial burden traditionally imposed on students, the tuition free system is also removing the incentive students had to graduate on time and making them less cost sensitive. Due to such, it is likely that Germany will see an increase to the average time students spend obtaining their college degrees.  

In addition to the increased cost in obtaining a degree, the loss of cost sensitivity may also lead to decreased accountability for the quality of education provided by the German universities. Like in many situations, people, or students in this case, are less like to hold another party accountable for the product or service they receive when they are not financially burdened. Take for example the K-12 education system in the US: the public K-12 system has long been criticized for it's ineffectiveness and declining standards while the private K-12 system seems to be flourishing.  

Finally, economists point out that, all things being equal, students who receive the same college degree will pay vastly different amounts for their "free college education" after graduation depending on what career path they choose. Take for example two students who take the exact same classes and obtain the same degree: if one student goes to work for the government after graduation and the other for a private company (doing the same work as the other student), it is likely that because of higher wages the student working for the private company will pay substantially more in taxes for his education. Granted, similar situations play out in any country that subsidizes colleges and universities, however, it will be substantially more prominent in Germany due to the increased taxes that will be needed to fund the tuition free universities.
Even with all the aforementioned hidden realities of the German tuition free system there is one undeniable benefit: increased access to higher education. Though the system disguises its true costs, it does so in an effort to make college education more accessible to everyone.

Charlotte, NC among fastest-growing big cities

According to new numbers released by the US Census Bureau, Charlotte was ranked number 2 among the fastest-growing big cities United States.

Based on the 2013 five-year American Community Survey, the Queen City has population of 757,278. This is a 40% increase since the last census in 2000.

Big cities are defined as those that had populations of more than 500,000 at the time of the 2000 census. Ranked first in this category  is Fort Worth, TX with Austin, San Antonio and El Paso (all Texas) rounding out the top five.

But not only the Queen City is growing fast and big. In the Charlotte region, Indian Trail experienced an increase of 186.8% in population, Cornelius grew by 113,7% and Huntersville by 92.4%.

Here Come the Germans

It's comes as no surprise, especially to those at BridgehouseLaw, that German-American roots are strong and rich. With nearly 48 million people across the US claiming German ancestry, German-Americans make up the country's largest diaspora. However, when it comes to business ownership, German-Americans account for only 8% of the stock of foreign direct investment, ranking them 7th (behind France, Britain, and Japan).

This year, however, firms such as Siemens, SAP, Bayer, and Infineon have been busy buying up American firms and thus far have spent close to $65 billion. (Infineon is buying International Rectifier, ZF Friedrichshafen is buying Michigan-based rival TRW, and Siemens is buying Dresser-Rand.) Of all the American firms receiving bids this year, roughly one-fifth have come from German buyers. The worldwide cross-border takeovers led by German firms have largely targeted American firms, accounting for 60% of all German takeovers.  

Economists attribute this trend to the high labor costs in Germany and the dim prospects for the euro zone. Additionally, countries such as China are becoming less hospitable to foreign firms forcing them elsewhere. As a result, German firms have been drawn to the rapidly growing American economy resulting from the fracking boom and the relatively cheap labor due to stagnant wages.

GA court rules that parents can be held liable for children's Facebook posts

A Georgia court recently ruled that the parents of two middle school students may be held liable for a fake Facebook account they setup that ridiculed a classmate.  

In 2011, Dustin Athearn and Melissa Snodgrass created a fake Facebook account that featured a picture of classmate Alexandria Boston taken with the "fat face" app. The page contained explicit language suggesting that Alexandria held racist viewpoints and was homosexual. Shortly after Alexandria discovered that Dustin and Melissa were the source of the page, the two admitted their involvement and each signed a written statement. The school's principal also notified the children's parents and placed them on a two day in-school suspension. However, the Facebook page remained accessible for an additional 11 months and wasn't deactivated, by Facebook, until shortly after Alexandria's parents filed suit against the two students.

The original complaint was dismissed by the Cobb County Superior Court in favor of the defendants but was ultimately reversed by the state Court of Appeals. The Court of Appeals specifically stated that the parents could not be held responsible for the initial creation of the page, however their negligence in allowing the page to remain active for an additional 11 months is actionable as one of the sources which caused the resulting injuries.

In response to the court's decision, Natalie Woodward, the attorney representing Alexandria, stated that in "certain circumstances, when what is being said about a child is untrue and once the parents know about it, then liability is triggered."