On August 7, 2026, the Court of Appeal for Ontario released its highly anticipated decision in Wigdor v. Facebook Canada Ltd.1 This decision makes it clear that termination provisions in Restricted Stock Unit (“RSU”) agreements will not be enforceable if they attempt to contract out of the Employment Standards Act, 2000 (the “ESA“)2, including by requiring immediate forfeiture on termination and thereby altering a “term or condition of employment” during the statutory notice period.
Background
Dr. Daniel Wigdor, a tenured professor in the Department of Computer Science at the University of Toronto, founded a consulting firm called Chatham Inc., which was acquired by Meta Platforms, Inc. (formerly Facebook, Inc.) in 2020. As part of the commercial transaction, he negotiated an employment agreement with Facebook Canada Ltd. and was granted 43,380 RSUs valued at US$7.5 million, which vested quarterly over a four-year schedule.
In December 2023, Facebook Canada terminated Dr. Wigdor’s employment without cause. The employer provided his minimum notice and severance pay under the ESA in accordance with the termination clause in his employment agreement, but maintained that his unvested RSUs immediately forfeited upon his termination under the terms of the RSU Agreements. Dr. Wigdor commenced legal proceedings, seeking damages for wrongful dismissal, including the RSUs that would have vested during the common law notice period.
Initial Decision3 of the Superior Court of Justice
The application judge found that the termination provisions in Dr. Wigdor’s employment agreement were void because they failed to recognize his prior years of service with Chatham. This is contrary to the ESA, which requires recognition of an employee’s total service in the context of the sale of a business. Consequently, she awarded Dr. Wigdor 10 months of common law reasonable notice.
However, she denied his claim for the RSUs that would have vested during the notice period, concluding that the provisions in the RSU Agreements which stated that no vesting of RSUs would continue during any notice period, whether under contract or statutorily, regulatory or common law, did not contravene the ESA and were enforceable. In particular, the application judge determined that Section 60 of the ESA (which prohibits the alteration of terms and conditions of employment during the statutory notice period) only applied to working notice, while Section 61 (pay in lieu of notice) did not contain such a restriction. As Dr. Wigdor received pay in lieu of notice, there was no requirement pursuant to the ESA to continue vesting of the RSUs during the statutory notice period.
Both parties appealed.
Dr. Wigdor Succeeds on Appeal
The Court of Appeal allowed Dr. Wigdor’s appeal regarding his RSU entitlements. Writing for a unanimous panel, Justice Copeland overturned the lower court’s narrow reading of the ESA. To assess the enforceability of the RSU forfeiture clauses, the Court applied the established two-part test from the Supreme Court of Canada’s decision in Matthews v. Ocean Nutrition Canada Ltd.4:
- But for the termination, would the employee have been entitled to the bonus or benefit during the reasonable notice period?
- If so, does the wording of the plan unambiguously alter or remove the employee’s common law right to reasonable notice?
Because there was no dispute that the RSUs would have vested had Dr. Wigdor remained employed during the 10-month notice period, the case turned on the second question.
The Court of Appeal ruled that Sections 60 and 61 of the ESA must be read together, not disjunctively, to ensure employees are in the same financial position whether they receive working notice or pay in lieu. Section 60(1)(a) explicitly states that an employer shall not reduce wages or “alter any other term or condition of employment” during a statutory notice period. Because Section 61(1)(a) requires pay in lieu to be “equal to the amount” the employee would receive under Section 60, pay in lieu of notice must also be calculated on the basis that no terms or conditions of employment are altered.
The Court found that Dr. Wigdor’s RSU grants were a form of employee compensation and constituted a “term or condition of employment”. As a result, the RSU Agreements’ termination provisions—which immediately cut off vesting upon termination—contravened the ESA and were completely void and unenforceable. Dr. Wigdor was awarded damages equal to the value of the RSUs that would have vested during the 10-month notice period, increasing his damages by US$4,711,647.29.
Key Takeaways
This decision is a critical wake-up call for employers in Ontario. Ensuring compliance with the ESA is essential not only for the purposes of enforcing termination clauses in employment contracts but also for clauses in associated policies and plan documents. If you utilize RSU plans, stock option agreements, or bonus policies, their termination and forfeiture provisions must fully comply with the ESA in order to effectively protect the business. A single non-compliant clause in an ancillary plan can invalidate your contractual protections and expose your organization to substantial common law reasonable notice claims. We encourage employers to contact us to review and update all employment agreements and incentive plan templates to ensure they are effectively protected.
For employees, this decision is a powerful reminder that just because limiting language exists in a contract, policy, or benefit plan, it does not mean this language is legally enforceable. Dr. Wigdor’s successful appeal demonstrates that courts will closely scrutinize complex equity and bonus plans to protect an employee’s statutory rights. If you are being asked to sign an employment agreement or other document limiting your entitlements on dismissal to any compensation items, or if you are facing a dismissal, you should seek legal advice to ensure you are not giving up substantial rights by signing these documents and/or that you are receiving an appropriate severance package upon dismissal.
We frequently work with both employers and employees to navigate complex compensation structures, draft enforceable agreements, and assess severance packages. If you have questions about RSU vesting, bonus entitlements, or contract enforceability, we can help—contact us today.
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Endnotes
- Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 (CanLII), <https://canlii.ca/t/kmhh6>.
- Employment Standards Act, 2000, SO 2000, c 41, <https://canlii.ca/t/56mvj>
- Wigdor v. Facebook Canada Ltd., 2025 ONSC 4861 (CanLII), <https://canlii.ca/t/kf0wc>
- Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 (CanLII), [2020] 3 SCR 64, <https://canlii.ca/t/jb004>
