A significant Ontario Court of Appeal decision has reshaped the legal landscape for employee equity compensation. In Wigdor v Facebook Canada Ltd., the court held that a provision in a restricted stock unit (RSU) agreement seeking to prevent vesting during the statutory notice period set out in the Employment Standards Act, 2000 (ESA) violated the ESA and rendered the provision unenforceable.
As a result, the employee was entitled to damages on account of continued vesting during the much lengthier common law notice period. The decision has significant implications for employers that offer RSUs and other forms of equity compensation and underscores the need for a careful review of existing plan documents, award agreements, and termination provisions.
In 2020, Meta Platforms Inc. acquired Chatham Inc. and hired its founder, Dr. Daniel Wigdor, as Facebook Canada’s director, research science. As part of his compensation package, he received 43,380 RSUs with an estimated value of approximately US$7.5 million, scheduled to vest over a four-year period. Facebook Canada terminated Dr. Wigdor’s employment in December 2023, providing eight weeks’ pay in lieu of notice and 12.5 weeks’ statutory severance pay per the ESA. Dr. Wigdor declined to sign a release that would have prevented him from challenging the forfeiture of his unvested RSUs.
The underlying RSU Agreements contained termination-related forfeiture provisions. The 2020 RSU Agreement provided that all unvested...
By Chukwuma Umeorah OPay Digital Services has dismissed as “false, malicious and misleading” a viral social media publication claiming that the fintech company would suspend operations from Septem...