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ARTICLE · 28 NOVEMBER 2022

Franchisors Beware: Amendments To The Competition Act Criminalize No-poach And No-hire Provisions

Osler, Hoskin & Harcourt LLP
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Pending amendments to the Competition Act will soon criminalize no-poach and no-hire provisions (including non-solicits) in certain circumstances. This is an important development for franchisors...

CanadaAntitrust/Competition Law
Shuli Rodal
Shuli Rodal
Andraya Frith
Andraya Frith
Dominic Mochrie
Dominic Mochrie
Kaeleigh Kuzma
Kaeleigh Kuzma
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Pending amendments to the Competition Act will soon criminalize no-poach and no-hire provisions (including non-solicits) in certain circumstances. This is an important development for franchisors as provisions relating to hiring and solicitation are common in franchise agreements in Canada. While many such provisions will continue to be defensible once the new law takes effect in June 2023, franchisors will want to carefully review their agreements in light of this new legal framework.

Competition Act amendments

Currently, no-poach and wage-fixing agreements are only addressable under the Competition Act on a civil basis if they may substantially prevent or lessen competition. However, effective June 23, 2023, amendments to the Competition Act will expand the criminal conspiracy provision in section 45 of the legislation by making it a criminal offence for unaffiliated employers to enter into an agreement not to solicit or hire each other's employees (i.e.,

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