Is it a crime?

“Once is happenstance,” Ian Fleming wrote in 1958. “Twice is coincidence. Three times is enemy action.” When three grocery chains decided to end a pandemic-era bonus for hourly workers — so-called “hero pay” — on the same day in June 2020, eyebrows in Ottawa went up.

When Loblaws’ then-president acknowledged that she’d told competitors about the move in advance, eyebrows went higher. When the Competition Bureau later acknowledged publicly that it couldn’t go after wage-fixing agreements criminally under the law as it stood, everyone knew the law was going to change.

And so it did, in June of 2023, when the revised s. 45(1.1) of the Competition Act came into force. It criminalizes wage-fixing agreements, doesn’t require proof of an effect on competition and carries hefty penalties — up to 14 years in prison, a fine set by the court, or both.

It also stirred up some confusion and anxiety in law firms across the country. “Conscious parallelism” — when a business acts in response to its competitors’ conduct, or takes an independent action knowing its effect on competitors might be to encourage them to do the same thing — isn’t considered a violation of s. 45 on its own, according to a Competition Bureau guidance document on wage-fixing and no-poaching agreements.

But that guidance also says that “parallel conduct coupled with facilitating practices” could “result in an inference by the Bureau of an agreement between the parties in violation of subsection 45(1.1).” As examples of “facilitating practices,” the Bureau cites “sharing sensitive employment information or taking steps to monitor each other’s employment practices.”

So what constitutes “sharing sensitive employment information,” and when does it cross the line? Many law firms publicize the wages they pay to articling students and first year associates, either on their own websites or on the NALP (National Association for Law Placement) Canadian online directory.

NALP recently chose to stop posting those salary ranges in its Canadian directory. There have been anecdotal reports of Canadian firms withholding salary information as well. Actual prosecution of the practice under s. 45(1.1) seems unlikely, but it appears not everyone is willing to take the chance.

“The amendments concerning wage fixing used some very broad language,” said Nikia Gray, NALP executive director. “We consulted with outside counsel and came to the conclusion that, until we get more guidance from the Bureau, we’re going to have to take a conservative approach.”

Ryan Baker, director of legal talent at Bereskin & Parr LLP, said NALP “made the decision for us” when it opted to stop publishing wage information.

“Historically, we have never posted salary ranges for our associates, but for law students we’ve always publicized the pay range through NALP,” he said. “I have some involvement with NALP and I understand their reasoning. But Canadian legal employers are not very happy with it.”

The Competition Bureau did publish updated guidance in May 2023. It also used some broad language.

“Information sharing does not ordinarily raise concerns under the Act …” it reads. “However, in certain circumstances, information sharing may give rise to an inference that an agreement exists between the parties under subsection 45(1.1) or be reviewable under Part VIII of the Act.

“Employers should take care when sharing commercially sensitive information with each other in the course of collaborative activities, including the sharing of employment terms, to ensure that the conduct would not raise concerns.”

“Generally speaking,” said a Competition Bureau spokesperson, “the fact that companies may offer similar or identical wages — publicly disclosed or not — does not in itself constitute an offence under the Competition Act. To constitute an offence, there must be evidence that employers have made an illegal agreement to set the wages.

“That said, the Bureau must conduct a thorough review of the facts before reaching any conclusions on potential violations of the Act.”

Jennifer Quaid, vice-dean research at the University of Ottawa’s civil law section, says law firms might be attempting to send a signal to the federal government that the “amended law leans toward overregulation. But I don’t know what their endgame is.”

She also questions whether Ottawa chose the right tool when it introduced a criminal deterrent to the Competition Act’s section on wage-fixing.

“My question is what [the government] hopes to achieve,” she said. “The aim here is to do something about arrangements that leave people at an economic disadvantage. But what does criminal enforcement do? It pursues infrequent convictions in order to create a deterrent effect. It’s not about compensating people.

“So what does that accomplish for workers? If it’s a promise to them, it’s a symbolic one.”

Baker and Gray both argue that the federal government’s guidance to date on wage-fixing hasn’t been clear enough — especially given that B.C. already has a “Pay Transparency Act” that requires employers to publish pay ranges in public job postings, and Ontario’s legislature is debating a similar law now.

“Clarity would be valuable,” said Baker. “I understand the concern about disclosing too much, but they could tell us more. None of us wants to fall on the wrong side of the law.”

“We don’t want to create a situation where our members fall afoul of the law simply because they’re using our service,” said Gray.

Baker said his firm will soon start posting salary ranges for articling students on its own webpage. He said the firm feels it’s the responsible thing to do.

“I understand NALP’s concerns and if I were in their shoes, I’d probably do the same thing,” he said. “But we think that as an individual employer, doing this is not a violation of the law. And we’re not sure what other firms pay.

“Every little bit of information is valuable to law students just getting started on their careers. It lets them know what they’re worth on the market, lets them avoid being taken advantage of. I don’t think law firms want to exploit students but this just makes it a little harder than it should be.”