Illinois attorney general sues Check Into Cash

October 26, 2017 GMT

STERLING – The Illinois attorney general is suing Check Into Cash of Illinois LLC, which has an office at 603 Freeport Road in Sterling and in 32 other cities, accusing it of imposing illegal noncompete agreements on its low-wage customer service employees.

The suit, filed Wednesday in Cook County Circuit Court, says the payday loan company, a subsidiary of national retailer Check Into Cash Inc., required all employees at all locations, including those who earn less than $13 per hour, to sign a noncompete agreement as a condition of employment, Attorney General Lisa Madigan said in a news release.

Under state law, noncompete agreements must be premised on a legitimate business interest and narrowly tailored in terms of time, activity and place. Since January, the Illinois Freedom to Work Act prohibits the use of noncompete agreements for employees earning minimum wage or less than $13 an hour.

“Check Into Cash inappropriately tries to retain low-income workers by requiring them to sign unfair noncompete agreements that attempt to prevent workers from getting better jobs elsewhere,” Madigan said in the release. “We should be encouraging, not stopping, people to get better, higher-paying jobs.”

The noncompete agreement restricts employees from working for any other business that provides consumer lending services or products for 1 year after they leave the company.

These services and products 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 release said.

The suit notes that a wide variety of businesses could fall within this broad definition, including retail stores or auto dealerships that extend credit on an incidental basis or entities, such as Western Union or the U.S. Postal Service, that transmit money.

Under the terms of the noncompete agreement, Check Into Cash employees are prohibited from working for any business that falls within this broad definition within 15 miles of any office or retail location of Check Into Cash, as well as any location of the company’s parents, affiliates or subsidiary companies.

This includes not only all 33 Illinois locations, but also all of the more than 1,000 such locations in 32 other states as well.

Madigan is seeking a declaratory judgment that the agreements are unenforceable and void, as well as an order requiring the company to notify impacted employees – both current and former – of the same.

In June 2016, Madigan filed a lawsuit against Jimmy John’s upon learning the sandwich shops required all employees to sign a noncompete agreement as a condition of employment, alleging the agreement was illegal and unenforceable under Illinois law.

The company settled in December 2016 and agreed not only to end the use of noncompetes for low-wage workers, but also to inform current workers that the agreements were unenforceable.

Madigan’s office also is investigating other companies that have imposed similarly restrictive noncompete agreements on low-wage workers, the release said.