{"id":8299,"date":"2026-09-11T15:49:34","date_gmt":"2026-09-11T19:49:34","guid":{"rendered":"https:\/\/perlaw.ca\/?p=8299"},"modified":"2026-09-11T15:49:34","modified_gmt":"2026-09-11T19:49:34","slug":"ontario-court-of-appeal-addresses-validity-of-forfeiture-provisions-in-equity-compensation-agreements-on-termination-of-employment","status":"publish","type":"post","link":"https:\/\/perlaw.ca\/fr\/2026\/09\/11\/ontario-court-of-appeal-addresses-validity-of-forfeiture-provisions-in-equity-compensation-agreements-on-termination-of-employment\/","title":{"rendered":"Ontario Court of Appeal Addresses Validity of Forfeiture Provisions in Equity Compensation Agreements on Termination of Employment"},"content":{"rendered":"

The Court of Appeal for Ontario (\u2018ONCA\u2019) recently released its decision in <\/span>Wigdor v. Facebook Canada Ltd.<\/span><\/i>, 2026 ONCA 572 (\u2018<\/span>Wigdor<\/span><\/i>\u2019) on August 7, 2026.\u00a0<\/span><\/p>\n

This case involved a wrongful dismissal matter in which the Appellant, Dr. Daniel Wigdor, successfully appealed the application judge\u2019s decision to dismiss his claim for the value of Restricted Stock Units (\u2018RSU\u2019) that would have vested during his common law notice period.<\/span><\/p>\n

The RSU Agreements, which were incorporated by reference into his employment agreement, would have disentitled Dr. Wigdor to further vesting of his RSUs immediately upon termination.\u00a0<\/span><\/p>\n

The Respondent employer, Facebook Canada Ltd., a subsidiary of Meta Platforms Inc., (\u201cFacebook\u201d) had also cross-appealed the judge\u2019s finding that the termination provisions of the employment agreement violated Ontario\u2019s <\/span>Employment Standards Act, 2000<\/span><\/i> (\u2018<\/span>ESA<\/span><\/i>\u2019), and order of damages equal to 10-months\u2019 notice.\u00a0<\/span><\/p>\n

Earlier Decisions\u00a0<\/b><\/h2>\n

A number of decisions were considered by ONCA in its analysis. These included\u00a0<\/span>Matthews v. Ocean Nutrition<\/span><\/i>,\u00a02020\u00a0SCC\u00a026 (\u2018<\/span>Matthews<\/span><\/i>\u2019) in which the Supreme Court of Canada (\u2018SCC\u2019) considered the issue of whether a terminated employee is entitled to damages for a bonus or similar entitlement that would have been payable during the common law reasonable notice period.\u00a0<\/span><\/p>\n

In <\/span>Matthews <\/span><\/i>the SCC set out two questions to ask in determining this issue:<\/span><\/p>\n

    \n
  1. But for the termination, would the employee have been entitled to the bonus during the reasonable notice period?<\/span><\/li>\n
  2. If so, does the wording of the bonus plan unambiguously alter or remove the employee\u2019s common law right to reasonable notice?<\/li>\n<\/ol>\n

    ONCA similarly considered its earlier decisions of <\/span>Paquette v. TeraGo Networks Inc.<\/span><\/i>,\u00a02016 ONCA 618 (\u2018<\/span>Paquette\u2019<\/span><\/i>) and <\/span>Taggart v. Canada Life Assurance Company\u00a0<\/span><\/i>(2006),\u00a02006 CanLII 53345<\/span> (\u2018<\/span>Taggart<\/span><\/i>\u2019).\u00a0<\/span><\/p>\n

    Application to Wigdor<\/b><\/h2>\n

    ONCA noted that the appeal engaged the second question in <\/span>Matthews<\/span><\/i>. However, it further considered whether the forfeiture terms of the RSU Agreements that were incorporated in Dr. Wigdor\u2019s employment contract altered Dr. Wigdor\u2019s vesting entitlements during his statutory notice period in such a way that they were inconsistent with sections 60 and 61 of the <\/span>ESA<\/span><\/i>.\u00a0<\/span><\/p>\n

    Section 60(1)(a)<\/span><\/a> of the\u00a0<\/span>ESA\u00a0<\/span><\/i>requires that an employer not alter any \u201cterm or condition of employment\u201d during a notice period under the Act, and <\/span>section 61(1)<\/span><\/a>\u00a0requires that an employer pay an employee a lump sum equivalent to what they would have been entitled to receive under section 60 had notice been given in accordance with that section.<\/span><\/p>\n

    Read together, these provisions require that a lump sum payment, which an employee is entitled to where pay is provided in lieu of working notice, be calculated on the basis that there are no alterations to the terms or conditions of employment during the statutory notice period.\u00a0<\/span><\/p>\n

    The forfeiture provisions of the RSU Agreements contravened the\u00a0<\/span>ESA<\/span><\/i>\u00a0because they purported to alter a term or condition of employment during the <\/span>ESA<\/span><\/i>\u00a0notice period by depriving employees who had been terminated of ongoing vesting of RSUs during that period.\u00a0<\/span><\/p>\n

    As a result, the provisions of the RSU Agreements relating to termination were invalid and unenforceable and did not remove an employee\u2019s common law rights in this regard. There was no dispute that had it not been for his termination, the RSUs in question would have vested during Dr.\u00a0Wigdor\u2019s common law notice period.\u00a0<\/span><\/p>\n

    ONCA held that Dr. Wigdor was entitled to damages equal to the value of the RSUs that would have vested during his 10-month common law notice period, which was of significant value, approaching $5 million USD.\u00a0<\/span><\/p>\n

    Importantly, the Court declined to consider whether equity-based compensation falls within the definition of \u201cwages\u201d in the\u00a0<\/span>ESA<\/span><\/i>, noting that the appeal was based on the argument that Dr. Wigdor\u2019s entitlement to the RSUs constituted a \u201cterm or condition of employment\u201d within the meaning of\u00a0subsection 60(1)(a) of the\u00a0<\/span>ESA<\/span><\/i>. That question remains outstanding.\u00a0<\/span><\/p>\n

    Insight<\/b><\/h2>\n

    This decision reinforces the importance of ensuring that employment agreements and related contracts are reviewed regularly.\u00a0<\/span><\/p>\n

    Taking a proactive approach will help ensure these contracts are valid and consistent with the <\/span>ESA<\/span><\/i>, which requires that all terms and conditions of employment are fully maintained during the applicable <\/span>ESA<\/span><\/i> notice period. The alternative can be costly, as discovered by Facebook following this appeal.\u00a0<\/span><\/p>\n

    Wigdor<\/span><\/i> wasn\u2019t the only decision related to employment termination that ONCA addressed this summer. ONCA also clarified the law surrounding termination clauses through their highly anticipated decision in <\/span>Baker v Van Dolder\u2019s Home Team Inc<\/span><\/i>., 2025 ONSC 952 (and companion decision of <\/span>Li v Wayfair<\/span><\/i>).\u00a0<\/span><\/p>\n

    You can read more about that decision in Karin Pag\u00e9\u2019s article in the Ottawa Business Journal, <\/span>Court of Appeal addresses broken law surrounding termination clauses<\/span><\/i>. <\/b>\u00a0<\/span><\/p>\n

    Our Employment Lawyers<\/a> Can Help<\/b><\/h2>\n

    If you have questions about employment agreement termination provisions, the Employment Law Group at\u00a0Perley-Robertson, Hill & McDougall LLP\/s.r.l.\u00a0will be pleased to assist<\/a>.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    The Court of Appeal for Ontario (\u2018ONCA\u2019) recently released its decision in Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 (\u2018Wigdor\u2019) on August 7, 2026.\u00a0 This case involved a wrongful dismissal matter in which the Appellant, Dr. Daniel Wigdor, successfully appealed the application judge\u2019s decision to dismiss his claim for the value of Restricted Stock […]<\/p>\n","protected":false},"author":3,"featured_media":8300,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"wds_primary_category":0,"wds_primary_expertise_area":0,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-8299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publication","expertise_area-employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/8299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/comments?post=8299"}],"version-history":[{"count":1,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/8299\/revisions"}],"predecessor-version":[{"id":8302,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/8299\/revisions\/8302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/media\/8300"}],"wp:attachment":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/media?parent=8299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/categories?post=8299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/tags?post=8299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}