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

Okanagan Rail Trail to officially open

Thursday, Sept. 27, 11 a.m., Oyama Boat Launch, Wood Lake; public welcome

VIDEO: Kelowna 10th Annual Youth Exhibition Powwow marked with Eagle Staff

Okanagan College’s 10th Powwow was honoured with special ceremonies

VIDEO: Kelowna Rockets look to leave Kamloops Blazers in the smoke

The season home opener takes place Friday night

Chinese author tackles racism and reconciliation

David Wong says cultural diversity should not be feared

UBC Okanagan professor tasked with increasing diversity in science

Westcoast Women in Engineering, Science and Technology names new associate chair

Fashion Fridays: Rock some animal print

Kim XO, lets you in on the latest fall fashion trends on Fashion Fridays on the Black Press Media Network

Feds launching review of oil tanker traffic in bid to renew pipeline approval

The feds have ordered the National Energy Board to bring recommendations on whether pipeline expansion should proceed

Horvat leads Canucks to 4-3 shootout victory over Kings

Vancouver dumps L.A. in NHL pre-season contest

Race is on for Shuswap late-run sockeye salmon

New estimates say about 750,000 sockeye will spawn on the Adams River, similar to 2014 dominant run

Update: Search called off for missing plane between Edmonton and Chilliwack

Search efforts were concentrated along the Highway 5 corridor between Valemount and Kamloops

Why Whistler for ski jumping in 2026? Calgary proposal gets pushback

Calgary 2026 proposes re-using the 2010 ski jumping venue Whistler for that sport and nordic

VIDEO: Hundreds line highway as family brings home body of B.C. teen

Northern B.C. showed their support by lining Hwy 16 as Jessica Patrick’s body returned to Smithers.

Despite progress, threat of 232 tariffs dominates NAFTA negotiations

Any deal is seen to require congressional approval before Dec. 1 to survive new Mexican government

B.C. MP Todd Doherty receives award for saving man who collapsed on a plane

Conservative MP was flying from Vancouver to Prince George, B.C., in June last year

Most Read