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

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

Fruit farmers in the Okanagan and Creston valleys are in desperate need of cherry harvesters amid COVID-19 work shortages. (Photo: Unsplash/Abigail Miller)
‘Desperate’ need for workers at Okanagan cherry farms

Fruit farmers are worried they’ll have to abandon crops due to COVID-19 work shortages

Earls On Top at 211 Bernard Avenue in Kelowna. (Google Maps photo)
Downtown Kelowna’s Earls ordered closed after COVID-19 transmission

Earls on Top on Bernard Avenue will be closed from June 18 to June 27

Danny Fulton receives his first dose of the COVID-19 vaccine at the Coast Capri Hotel on April 27. The pop-up clinic was hosted by the First Nations Health Authority. (Aaron Hemens/Capital News)
Drop-in COVID-19 vaccine clinic planned for Kelowna

Clinic at Kelowna Secondary School from June 22 to 24 from 1 p.m. to 7:30 p.m.

Dereck Donald Sears. (Contributed/Crimestoppers)
Murder charge laid in relation to suspicious Kelowna death

Dereck Donald Sears is charged with second-degree murder in the death of Darren Middleton

A motorycle crash has been reported on Westside Road. (Google Maps)
UPDATE: Westside Road reopened following motorcycle crash near Vernon

AIM Roads advises drivers to expect delays due to congestion

A small pod of Pacific white-sided dolphins pass by close to shore in Campbell River June 16, 2021. Still capture from video courtesy of Kimberly Hart
VIDEO: Dolphin sunset captured from Vancouver Island shore

Spectacular setting for view of travelling pod of Pacific white-sided dolphins

Jeanette Megens
KCR: Volunteering is sharing your story

Kelowna Community Resources shares stories of its volunteers in a weekly column

(File photo)
Penticton not holding Canada Day activities out of respect for Indigenous people

Cities across B.C. are cancelling the holiday after an increased spotlight on Canada’s dark history

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Police are asking for public assistance in locating Anthony Graham who has been charged with the murders of Kamloops brothers Carlo and Erick Fryer. (RCMP photo)
2 charged, suspect at large in killings of B.C. brothers linked to gang activity: RCMP

Kamloops brothers Erick and Carlo Fryer were found deceased in May on a remote Okanagan road

Albert Health Minister Tyler Shandro and Alberta Premier Jason Kenney unveil an opening sign after speaking about the Open for Summer Plan and next steps in the COVID-19 vaccine rollout, in Edmonton, Friday, June 18, 2021. THE CANADIAN PRESS/Jason Franson
Alberta 1st province in Canada to lift all COVID-19 public health restrictions

70.2% of eligible citizens 12 and older in the province have received a dose of the vaccine

Fraser Health registered nurse Ramn Manan draws a dose of the Pfizer COVID-19 vaccine into a syringe at a walk-up vaccination clinic at Bear Creek Park, in Surrey, B.C., on Monday, May 17, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Honour our fathers’ with COVID-19 vaccine protection, B.C. urges

109 new cases Friday, 75 per cent of 12 and up immunized

Most Read