COMPETITION - Agreement - Enforcement and interpretation guidelines - Conspiracy - Economic duress

Law360 Canada ( March 31, 2025, 12:23 PM EDT) -- Appeal by appellant against a chambers judge’s decision summarily dismissing a proposed class action. The appellant sought to certify a class action on behalf of workers negatively impacted by a clause in franchise agreements between the TDL Group Corp (TDL), the franchisor of Tim Hortons, and its franchisees, who operated around 3,860 Tim Hortons locations in Canada. He alleged that TDL conspired with its franchisees to harm employees by limiting their employment mobility through a “no hire clause” in franchise agreements. He claimed that the clause prevented franchisees from hiring employees from other Tim Hortons franchises, allegedly resulting in wage suppression and anti-competitive practices. The appellant’s claim was initially based on a breach of the Competition Act and a civil conspiracy to use unlawful means to suppress wages. However, the claims were dismissed, leaving only the allegation of a predominant purpose conspiracy, which required proving that the primary intent of the clause was to harm employees. The chambers judge found no genuine issue for trial, as the evidence showed that the clause was intended to protect franchisees’ investment in employee training, not to harm employees. The judge accepted the testimony of Gregoire, TDL’s vice-president of franchise operations, who stated that the clause aimed to prevent franchisees from losing trained employees to other franchisees, thereby protecting their business interests. On appeal, the appellant argued that the judge erred in her characterization of the injury, in accepting Gregoire’s evidence, and in concluding there was no evidence of a conspiracy. The respondent submitted that no inappropriate adverse inference was drawn....
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