At a glance

• The Ontario Court of Appeal (Court) ruled in Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 (Wigdor) that Restricted Stock Unit (RSU) provisions which immediately terminate vesting on dismissal may contravene Ontario's Employment Standards Act 2000 (ESA).
• The Court confirmed that the ESA's prohibition on altering an employee's terms and conditions of employment during the statutory notice period applies whether an employee receives working notice or pay in lieu of notice.
• RSU entitlements that form part of an employee's compensation package may constitute a 'term or condition of employment' protected under the ESA.
• The Court found that contractual provisions preventing RSU vesting during statutory notice periods were unenforceable and awarded the employee approximately USD4.7 million for RSUs that would have vested during the reasonable notice period.
• The decision increases the risk that equity forfeiture clauses in employment-related compensation arrangements will be found unenforceable, prompting employers to review RSU and other equity incentive plans.

In a decision with significant implications for employers offering equity-based compensation in Ontario, the Ontario Court of Appeal has ruled that RSU agreements incorporated into employment agreements, which purport to terminate vesting immediately upon termination contravene Ontario's ESA The Court's decision in Wigdor clarifies how the ESA's prohibition against altering a 'term or condition of employment...

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