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

VIDEO: Bowen Byram named top prospect

Giants defenceman recognized as premier NHL draft pick

Langley golfer James Allenby takes Canada Life Open lead

Shot career-low round at Point Grey Golf & Country Club

Langley Thunder kick off 2019 season with high hopes

Home opener set for Wednesday, May 29 against the Burnaby Lakers.

Langley Home Expo shows off home and yard improvements

The annual event is being held in Brookswood at the George Preston Rec Centre

Winner announced in Langley Total Makeover Contest

Cheri McBride thanked friends and family for supporting her

Police release photos of suspect in daytime sex assault at Vancouver woman’s home

A young woman, in hers 20s, was followed home by the man, before he violently attacked her inside

Raptors beat Bucks 100-94 to advance to franchise’s first-ever NBA Finals

Leonard has 27 points, 17 boards to lead Toronto past Milwaukee

Third person charged in death of B.C. teen Bhavkiran Dhesi

Inderdeep Kaur Deo facing charge of accessory after the fact to murder

Kamloops girl, 9, recovering from carbon monoxide poisoning now out of ICU

Her mother who was sleeping in the same tent with her did not survive

UPDATE: Surrey RCMP say boy, 11, missing for two days found safe

Dominic Mattie was last seen at 5 p.m. in the 13500-block of Gateway Drive in Surrey

‘I think he’s still alive’: B.C. mom pleads for help finding son last seen a month ago

Family offering $5,000 reward for information leading to the safe return of Tim Delahaye

New poll suggests one-third don’t want politicians to wear religious symbols

Local politicians shouldn’t be allowed to wear hijabs, crucifixes or turbans on the job, survey suggests

Raptors fans far from home adjust plans to watch pivotal playoff game

Raptors currently lead the playoff series 3-2, and a win Saturday would vault them into NBA finals

Most Read