RSU agreements stipulated that employee forfeited all unvested units upon termination
Employers have faced increased scrutiny of their variable and equity compensation plans over the years, especially with respect to whether these aspects of an employee’s compensation can be discontinued during statutory notice periods under employment standards legislation. Whether it’s because your business is cost-conscious or risk averse, employers are honing in on their variable and equity compensation plans to ensure they are enforceable and protect their businesses interests while still complying with statutory requirements.
In one decision that may make this review more straightforward for employers, the Ontario Superior Court confirmed in Wigdor v. Facebook Canada Ltd., 2025 ONSC 4861, that restricted share units (RSUs) are not “wages” or “benefit plan contributions” under the Ontario Employment Standards Act (ESA). As such, the employer’s RSU Agreement, which required the employee to forfeit their unvested RSUs on termination, was valid and enforceable.
In Wigdor, the employee, Dr. Daniel Wigdor, was employed with Facebook Canada, a wholly-owned subsidiary of Meta. As Director, Research Science, Wigdor enjoyed a generous employment agreement that included entitlement to RSUs, which were granted when Wigdor commenced employment with Facebook and on an ongoing basis in accordance with Meta’s 2012 Equity Incentive Plan and RSU Award Agreements.
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