A Burger King Whopper meal combo is shown at a restaurant in Punxsutawney, Pa., on February 1, 2018. At least one quick-service restaurant company with hundreds of locations across Canada may stop requiring its franchisees to sign agreements prohibiting them from hiring employees from another franchisee. The so-called no-poach clause is “common,” but has recently caused concern it may stifle wages and prompted a rethinking of practices by large operators. THE CANADIAN PRESS/AP, Gene J. Puskar

Restaurant Brands International to review policy over poaching employees

One of Canada’s largest fast-food company to review ‘no-poach’ franchise agreements

One of Canada’s largest fast-food companies says it will review a controversial clause in its franchisee contracts less than a week after numerous competitors in the U.S. dropped similar language from their contracts to avoid an antitrust lawsuit.

The so-called no-poach clause — in which franchisees sign agreements prohibiting them from hiring employees from other franchisees — is common, but has recently caused concern it may stifle wages and prompted a rethinking of practices by large operators.

Restaurant Brands International, which owns Tim Hortons, Burger King and Popeyes Louisiana Kitchen, includes such a clause in agreements with its franchisees in Canada and the U.S. where it boasts more than 10,000 restaurants.

RELATED: Tim Hortons signs agreement to expand to China

RBI spokeswoman Devinder Lamsar called it “a fairly standard practice for years” in the retail and restaurant industry.

“Franchisees invest heavily in training their team members and they have always shared an interest in encouraging their best talent to stay with their restaurants,” she said in a statement.

However, the parent indicated it is aware of recent questions surrounding the practice.

“We will be speaking with our franchisee advisory boards in the coming couple of weeks with a view to changing this clause to reflect a more mobile workforce,” Lamsar said.

The shift would put it on par with seven fast-food giants who last week committed to ending the practice in the United States to avoid a lawsuit from the office of the Attorney General for Washington State. According to a statement, the Attorney General’s office launched an investigation into the practice this year as the clauses may violate antitrust provisions in the state’s Consumer Protection Act.

Four of the seven companies have a significant Canadian presence: Arby’s, Carl’s Jr., Cinnabon and McDonald’s. None of the companies responded to questions about whether their Canadian franchisees are subject to no-poach rules, and if so, whether they intend to stop using them north of the border.

The practice came into the spotlight after two Princeton University academics released a working paper in late 2017 that examined documents from the year 2016 for all franchisors with more than 500 franchise units in the U.S. and found that 58 per cent of contracts included such a clause. Eighty per cent of the 40 quick-service restaurant operators included in the paper enforced a no-poach rule.

The paper suggested the clauses may result in suppressing wage growth.

“It might help explain a recent puzzle in the U.S. job market,” the paper reads, adding unemployment is low and job openings are high, but wage growth “has remained surprisingly sluggish.”

The data was provided by FRANdata, a franchise market-research firm. A company spokesperson said it could not provide similar data for Canadian franchises as it lacks complete information for the country.

RELATED: Tim Hortons, franchisees spat over $700M plan to reno many locations

The Canadian Press asked more than a dozen eatery operators on the American list with a significant presence in Canada whether they also incorporate no-poach rules into their Canadian franchisee contracts — a majority of which did not respond.

Dunkin’ Donuts, whose parent company also owns Baskin-Robbins, denied including the clause. A spokesperson for Dunkin’ Donuts said the company removed the provision more than 15 years ago for both chains, and while it may still appear for some franchisees operating under an older agreement, it is not enforced.

A spokesperson for Wendy’s said its franchise agreement does not have an anti-poaching provision in either country.

RBI was the sole company to acknowledge using the clause and said it was considering changing its policy as questions are being raised about the practice.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Six Sto:lo chiefs sign MOU agreement affirming Indigenous rights

Moving to next phase of nation-to-nation negotiation in preparation for final treaty

Chilliwack Chiefs sit atop BCHL standings

No one expected the young Chiefs to be this good this fast, but can it last?

‘Police are ready’ for legal pot, say Canadian chiefs

But Canadians won’t see major policing changes as pot becomes legal

On Oct. 19, gospel musician, Rob Berg, hosts first concert in Chilliwack in 25 years

Held at the Sardis Community Church, the concert celebrates his career and new album release

Outgoing Chilliwack board chair says anti-SOGI trustees won’t be allowed in schools

Candidates’ anti-LGBTQ rhetoric makes for awkward situations with students, teachers, administrators

Naked man jumping into Toronto shark tank a ‘premeditated’ stunt: official

The man swam in a tank at Ripley’s Aquarium of Canada

Trump: Saudi king ‘firmly denies’ any role in Khashoggi mystery

Secretary of State Mike Pompeo is travelling to the Middle East to learn more about the fate of the Saudi national

Microsoft co-founder Paul Allen dies at 65

Allen died in Seattle from complications of non-Hodgkin’s lymphoma

Transport Canada to take new look at rules, research on school bus seatbelts

Canada doesn’t currently require seatbelts on school buses

Sockeye run in Shuswap expected to be close to 2014 numbers

Salute to the Sockeye on Adams River continues until Sunday, Oct. 21 at 4 p.m.

Michelle Mungall’s baby first in B.C. legislature chamber

B.C. energy minister praises support of staff, fellow MLAs

B.C. man who abducted and assaulted 11-year-old girl has parole rules tightened

Brian Abrosimo made ‘inappropriate and sexualized’ comments to female staff

Canucks: Pettersson in concussion protocol, Beagle out with broken forearm

Head coach Travis Green called the hit ‘a dirty play’

Most Read