Canadian Lawyer InHouse

41 CANADIANLAWYERMAG.COM/INHOUSE NOVEMBER 2016 I n d u s t r y S p o t l i g h t chain McDonald's is a "joint employer" for the purposes of U.S. labour legislation. The Canadian Franchise Association is pushing hard against any change. A new law in Ontario does not necessarily mean that other provinces will follow suit, but it could have a major impact on the fran- chise business in Canada's biggest market. "The fear is this is going to be a snow- ball going down the hill, and unstoppable at some point. It would really be a sea change," Weinberg says. Noting that big companies could simply stop franchising if the changes went ahead, adopting a corporate model instead, he adds: "Ontario risks making it- self the most unfriendly jurisdiction in the world for franchising." Allan Dick, a partner with Sotos LLP, says the arguments about the joint employer issue are political rather than legal and he remains optimistic that Ontario will not change its labour rules in a way that puts the franchise sector at risk. "The intention is certainly for there not to be joint employment on both the franchi- sor and the franchisee side, and given that the two sides are fairly aligned on that . . . I think it should be fairly clear that franchi- sees employ their staff," he says. "Franchi- sors have almost no day-to-day contacts with franchisees' employees and for them to have responsibility for them on a legal basis to me just doesn't seem good business or what any- body would expect in the marketplace." Another concern, particularly in Que- bec, centres on the obligations of franchi- sors highlighted in the Dunkin' Brands Ca- nada Ltd. v. Bertico Inc. case, which ruled that Dunkin' Donuts' Canadian operations had not done enough to promote the brand as Tim Hortons ate away at their share of the Quebec market. The Superior Court awarded almost $18 million to the franchi- sees, including interest and legal costs. Lawyers are not too worried that the rul- ing will have a major impact on franchise businesses outside Quebec, given the dif- ferences between Quebec's civil law-based legal system and the common law system in the rest of Canada. But they are still watch- ing the situation carefully. "It is a compelling case for the rest of Canada because it's an assessment of how a franchisor exercises their business judgment," says Dick. "If the courts do not like what franchisors do in situations that might require a system change . . . then Dunkin' Donuts might have applicability. Courts can consider that franchisors can't necessarily leave franchisees in the lurch, in certain circumstances." Quebec-based Teasdale says the Dunkin' case raised issues about franchisors' obliga- tions and how they protect their brand. But it was a specifi c, fact-driven case that may not be applicable elsewhere. "The Dunkin case is just a reminder, a pretty violent reminder because of the award, that they have to be on their toes and they have to be alert and vigilant. And that's how they are going to remain relevant and remain successful," he says. IH Because business issues are legal issues. So if you want to get ahead in business, get the degree that gets you there faster. ONE YEAR – PART - TIME – NO THESIS FOR L AWYERS AND NON - LAWYERS law.utoronto.ca/ExecutiveLLM GPLLM Global Professional Master of Laws [Get a Master of Laws] Untitled-3 1 2015-03-02 9:02 AM

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