Employers take down wage information in response to Competition Act amendments
How much are you going to earn during your 2L summer and early legal career? Now, it’s a lot harder to know because the Competition Bureau’s broad interpretation of wage-fixing has spooked employers.
Until this summer, many legal employers used to publish the wages they paid to 1Ls, 2Ls, articling students and 1st year associates on nalpcanada.com or their website.
On June 23, 2023, s. 45(1.1) of the Competition Act came into force, prohibiting unaffiliated employers from entering into or enforcing wage-fixing or non-solicitation agreements. Wage-fixing agreements are agreements to fix, maintain, decrease, or control wages, salaries, or terms and conditions of employment. Non-solicitation agreements are agreements not to solicit or hire each other’s employees.
Before June 23, 2023, the Competition Bureau could review wage-fixing and non-solicitation agreements under s. 90.1 of the Competition Act. Under this civil subsection, the Competition Bureau can order employers not to enforce wage-fixing or non-solicitation agreements if it can prove on a balance of probabilities that the agreement will substantially, or is likely to, lessen competition.
Subsection 45(1.1) makes wage-fixing agreements per se illegal–there is no requirement for prosecutors to prove that the agreements had any effect on competition. It is a criminal law subsection requiring proof beyond a reasonable doubt and carries a penalty of up to 14 years imprisonment, a fine determined by the court or both.
The Competition Bureau’s Enforcement Guidance on wage-fixing and no poaching agreements and Enforcement Guidelines on wage-fixing and no-poaching agreements do not consider mere conscious parallelism to be a violation of s. 45 of the Competition Act. Conscious parallelism is “when a business acts independently with awareness of the likely response of its competitors or in response to the conduct of its competitors.”
However, the Enforcement Guidance and Enforcement Guidelines have spooked some employers into taking down information on employee wages that they used to publish on their websites and in job postings. The March 27, 2023 Enforcement Guidance states that “parallel conduct coupled with facilitating practices, such as sharing sensitive employment information or taking steps to monitor each other’s employment practices, may be sufficient to prove that [a wage-fixing or no-poaching] agreement was concluded.”
The Competition Bureau softened their language in their May 30, 2023 Enforcement Guidelines: “Information sharing does not ordinarily raise concerns under the Act because parties usually want to maintain their commercial and competitive advantage. However, in certain circumstances, information sharing may give rise to an inference that an agreement exists between the parties under s. 45(1.1) or be reviewable under Part VIII of the Act.”
Nevertheless, some employers are worried that they might be charged or found guilty of wage-fixing merely for paying the same wages as some of their competitors and publishing employee wage information. Two sources at two national full-service law firms, who wish to remain anonymous, told Ultra Vires (UV) that their firms had ceased publishing employee wage information in response to s. 45(1.1) of the Competition Act coming into force.
Nikia Gray, Executive Director of NALP (The National Association of Law Placement) told UV:
NALP removed the compensation information from the Canadian Directory of Legal Employers in response to the recent amendments to the Canadian Competition Act, which went into effect this past June and contain new provisions related to the sharing of competitively sensitive information and wage-fixing. After reviewing the amendments and the related guidance published by the Competition Bureau, NALP determined that it was in the best interest of our members for us to remove all compensation information from the Canadian Directory.
Given that the maximum punishment for violating s. 45(1.1) is 14 years imprisonment and what is essentially an unlimited fine, it’s understandable that employers are erring on the side of caution. On June 23, 2023, all fines for offences under the conspiracy provision (s. 45) of the Competition Act were also changed from a maximum of $25 million to a fine at the discretion of the court. Parliament signalled to judges that they think fines greater than $25 million may sometimes be warranted for conspiracies to fix prices or wages.
Wage-fixing can be an uncompetitive practice and harm workers, but the Competition Bureau’s broad interpretation of the offence in s. 45(1.1) appears to be causing unintended anti-competitive effects and has a questionable legal foundation.
In a blog post, Goodmans LLP implies that the Competition Bureau’s interpretation of s. 45(1.1) is too broad:
[…] [T]he guidelines warn the Bureau may attempt to treat parallel conduct paired with other facilitating practices (e.g., exchanging information about each other’s employment practices) as a violation. The guidelines suggest that merely “taking steps to monitor” other employers’ practices could be a facilitating practice, but there is no modern history of Canadian courts accepting that mere monitoring of a rival constitutes an agreement.
The Canadian Bar Association submission on the Enforcement Guidance says:
The [Competition Bureau’s] suggestion that monitoring is improper or may circumstantially establish an illegal agreement is unwarranted. Monitoring—or gathering information about conditions prevailing in the market—is an essential aspect of the competitive process. Prospective employers and employees alike need to understand wages or other terms of employment prevailing in markets to inform their decisions. There is nothing inherently suspect of unilateral efforts taken to monitor a market.
In 2016, the US Department of Justice announced that they interpreted wage-fixing and non-solicitation agreements to be criminally prohibited by US antitrust law and that they would start to investigate and prosecute these agreements. The US Department of Justice’s Antitrust Guidance For Human Resources Professionals cautions that “sharing information with competitors about terms and conditions of employment can also run afoul of the antitrust laws.” However, it notes that not all information exchanges are illegal and an information exchange may be lawful, for example, if a neutral third party manages the exchange.
The NALP website continues to publish wage information for US legal employers despite the US Department of Justice enforcing a prohibition on wage-fixing agreements since 2016.
Similarly sized legal employers in each geographic region of North America tend to pay similar wages. This does not mean that there is a wage-fixing agreement in place. Competitive forces can also cause wages or prices to converge.
In an October 13, 2023 comment to UV, the Competition Bureau implied that they do not think their broad interpretation of s. 45(1.1) is causing decreased wage transparency, since “companies choosing to publicly disclose wages, even if they are similar to other companies within the same marketplace, would not, in itself, constitute an offence under the Competition Act.” However, the comment also reiterated that “parallel conduct coupled with a practice of sharing sensitive employment information or taking steps to monitor each other’s employment practices, may be sufficient to prove that [a wage-fixing] agreement was concluded.”
Nikia Gray stated that “We are continuing to monitor guidance published by the Competition Bureau and will re-evaluate whether we can include compensation information in the Canadian Directory as we learn more about how these amendments will be interpreted.”
For the sake of competition and the benefit of jobseekers, the Competition Bureau should clarify how employers can publish wage information without the risk of violating the Competition Act. They should not stifle the trend towards increased wage transparency. For example, British Columbia’s Pay Transparency Act has required employers in British Columbia to include the expected pay range in all public job postings since November 1, 2023. On November 14, 2023, Bill 149 was introduced in the Ontario Legislature which would impose the same requirement for Ontario.
In the interest of promoting competition and wage transparency, this article includes tables outlining various legal wage grids.
Historically, in Toronto, most—but not all—large law firms paid salaries for summer students, articling students and associates on the same grid. This salary grid is sometimes referred to as “the market rate” or the “large firm grid”: see Table 1.
The Government of Ontario and many of its affiliated employers also pay on their own grid: see Table 2.
The Department of Justice Toronto office follows a grid in the Law Practitioner (LP) collective agreement: see Table 3. The rest of the Department of Justice offices follow a different grid in the LP collective agreement.
| Position | Salary |
| 1L Summer Student | $1,900 per week ($98,800 annualized) |
| 2L Summer Student | $1,900 per week ($98,800 annualized) |
| Articling Student | $1,900 per week ($98,800 annualized) |
| 1st Year Associate | $130,000 per year |
| 2nd Year Associate | $150,000 per year |
| 3rd Year Associate | $175,000 per year |
| 4th Year Associate | $195,000 per year |
| 5th Year Associate | $215,000 per year |
| 6th Year Associate | $235,000 per year |
| 7th Year Associate | $255,000 per year |
| Partner | Varies |
Table 1: Common compensation rates for large law firms’ Toronto offices.
| Position | Salary |
| 1L Summer Student | $627.38 per week ($32, 623.50 annualized) |
| 2L Summer Student | $703.86 per week ($36,601.50 annualized) |
| Articling Student | $1457.33 per week ($75,781.16 annualized) |
| 1st Year Associate | $92,105 per year |
| 2nd Year Associate and up | Varies |
Table 2: Common compensation rates for the Government of Ontario and affiliated employers. Credit: 2024 OPSEU SEPPO Unified Agreement
| Position | Salary |
| 1L Summer Student | N/A |
| 2L Summer Student | $1,144.75 per week ($59,527 annualized) |
| Articling Student | $72,126 per year |
| 1st year associate | $82,430 to $86,306 per year |
| 2nd year associate | $90,362 to $94,610 per year |
| 3rd year associate | $99,056 to $103,710 per year |
| 4th year associate | $108,585 to $113,687 per year |
| 5th year associate and up | Varies |
Table 3: Common compensation rates for the Department of Justice’s Toronto Regional Office. Credit: Law Practitioner (LP) Collective Agreement
