In Wigdor v Facebook Canada Ltd., 2026 ONCA 572, the Ontario Court of Appeal (the “ONCA”) confirmed that employment agreement language may violate the Ontario Employment Standards Act, 2000 (the “ESA”) if it purports to forfeit the continued payment of equity-based compensation upon employment termination.
This decision highlights that employers should exercise caution when drafting forfeiture language for equity-based compensation upon termination. If equity entitlements form part of an employee’s terms and conditions of employment, the employer will be required to continue the employee’s participation throughout the employee’s statutory notice period or, alternatively, compensate the employee accordingly where pay in lieu of notice is provided.
The appellant, Dr. Wigdor, founded Chatham Inc. (“Chatham”), a company providing technology consulting services for financial, legal and technological firms in 2011. Following Dr. Wigdor’s provision of services to Meta Platforms, Inc. (“Meta”) through Chatham beginning in 2016, Meta and Dr. Wigdor negotiated a share-purchase agreement to sell Chatham to Meta in 2020. The share-purchase agreement included the stipulation that Dr. Wigdor would become an employee of Facebook Canada Ltd., and that his years of service with Chatham would be recognized. As part of the purchase, Meta also agreed to grant Dr. Wigdor 43,380 Restricted Stock Units (“RSUs”) valued at $7.5 million USD. Dr. Wigdor was employed pursuant...
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