Canadian HR Reporter

www.hrreporter.com 9 "It sends a signal that the Competition Bureau feels strongly that these types of agreements are anti-competitive." Shuli Rodal, Osler, Hoskin & Harcourt assess agreements for the purchase of products and services — including employee no-poaching and wage-fixing agreements — under section 45: "While the Competition Bureau views such buy- side agreements between competitors as raising serious competition issues, the 2009 amendments to the Competition Act included the removal of the word 'purchase' from section 45, limiting its scope to supply-side agreements." So, to the extent that the bureau wishes to take on no-poach or wage- fixing agreements, it would have to do so under the civil competitor collaboration provision, 90.1, says Rodal. "It also sends a signal that the Competition Bureau feels strongly that these types of agreements are anti- competitive, and that just because they're not necessarily to be pursued criminally, it doesn't mean everybody should not worry at all." Takeaways for HR, employers While the government can't impose any fines or financial penalties for these types of agreements, an investigation could damage a company's reputation and be extremely expensive and disruptive, says Rodal. "Unlike in the U.S., it won't be pursued criminally here, but you've still got to watch what you're doing and have an acceptable business justification for the The other provision introduced in 2009, section 90.1, says all agreements between competitors can be reviewed to see whether they substantially prevent or lessen competition, says Rodal. "Basically, you had the very narrow set of agreements, which are subject to only proof that there was an agreement; and then you have everything else, which was subject to an assessment based on the impact it had on the market, commercial justification, etc." Competition Bureau weighs in Despite the changes, there was some discussion over the years because the criminal provision didn't specifically address employment and wage-fixing agreements, says Rodal. For example, could employment be considered an offer of a product or service? With the 2009 amendments, there were changes to the actual language and scope of what is caught in the criminal sphere rather than in the civil sphere, says Banicevic. "That's where some of the questions have arisen in terms of 'What is caught under criminal? And how do you look at those types of agreements relating to poaching, non-poaching agreements and wage fixing?'" As a result, on Nov. 27, 2020, the Competition Bureau put out a statement saying that it would not actions that you're taking." But any companies that are operating on both sides of the border need to be careful about the "vastly different" regime in the U.S. with respect to criminal law enforcement, says Brown. And while section 90.1 doesn't have as much teeth as section 45, employers still don't want to be wrapped up in this, she says. "It's potential reputational damages, it's ge tting wrapped up in in cumbersome proceedings," says Brown. "The Competition Tribunal, if they find that there's a problem, they can make orders, including prohibiting basically anyone from doing anything under that agreement or arrangement that's been made." Plus, employers are often held to task by unions — probably more so than in the United States — says Paul Macchione, senior associate at Norton Rose Fulbright in Toronto. "Just because something is not held to be criminal doesn't mean there aren't repercussions if you're not treating your workforce appropriately." And instead of no-poaching agree- ments, most companies can use non- compete agreements with employees, he says, although these face a very high standard. "They're actually found prima facie unenforceable unless they're no more restrictive than necessary by our courts," says Macchione. Overall, it's best practice to make sure there are legitimate opportunities for collaboration within a market, such as industry associations or trade groups, says Brown. "[Make sure] that you're not sharing competitively sensitive information with a competitor, and if there is a desire to share information, it should be collected by a third party and then disseminated in aggregated form so that it can't be attributed to any competitor. And it's always safer to share, for example, historical information rather than for ward-looking or current information." CHRR

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