A recent decision from the Alberta Court of King’s Bench, Ross v. Newly Institute Inc., 2026 ABKB 538, serves as a stark reminder to both employers and executives regarding two pivotal tenets of employment law: dismissal by system lockout and exclusion, and the strict requirement for fresh consideration when reducing or amending an employee’s contractual entitlements.

Whether you are an employer managing a difficult executive exit or an executive navigating corporate turmoil, understanding this decision is essential.

What Happened

Dr. Marshall Ross served as Chief Scientific Officer of Newly Institute Inc. His December 2021 contract guaranteed an 18-month severance payment ($300,000) on termination without cause. In March 2022, the company presented a revised agreement that sharply cut that entitlement, reciting a $500 “signing bonus” as consideration, the same $500 already paid under the original contract.

In July 2022, amid internal turmoil, Dr. Ross relayed staff concerns to the CEO at a meeting. Shortly after, the company:

  • Unilaterally cut off his access to company email and IT systems.
  • Emailed his personal Gmail: “We wish the three of you all the best in your future endeavours.”
  • Excluded him from a company townhall and ignored his requests to restore access.

When Dr. Ross asserted he had been terminated, the company tried to reverse course, denying any dismissal and demanding he report to work or be deemed to have abandoned his role. The court found he had been wrongfully dismissed, that his alleged “insolence” did not amount to just cause, and that the March 2022 agreement was unenforceable for lack of fresh consideration. He was awarded his full $300,000 entitlement.

Strategic Implications for Employers

Key Takeaway: an employer cannot cut off an employee’s access or unilaterally alter core contractual terms, without triggering termination/constructive dismissal liability.

  1. Practical actions speak louder than words. Even without a formal termination letter or Record of Employment, cutting off IT access, excluding someone from company life, and sending a vague farewell email will be read objectively as a dismissal. Courts look at substance over form, and trying to “cure” it afterward by alleging job abandonment rarely succeeds.
  2. Contractual amendments require fresh consideration. Continued employment isn’t valid consideration for a contract that reduces an employee’s rights, and recycling a bonus already paid under the earlier agreement won’t work either. A revised agreement with reduced entitlements needs a genuine new benefit in exchange.
  3. “Insolence” is a high bar. Candid feedback about leadership, delivered respectfully, rarely meets the threshold for just cause, even where it includes a suggestion that a CEO step aside.

Strategic Implications for Employees & Executives

A signed employment agreement which modified preexisting terms and conditions isn’t automatically binding, and a system lockout is strong evidence you’ve been dismissed.

  1. Document a lockout immediately. If your access to company systems or meetings is revoked without a clear, formally communicated reason, that’s evidence working in your favour. Asking to keep working in writing (as Dr. Ross did from his personal email) makes it much harder for an employer to later claim you resigned or abandoned your role.
  2. Your original contract may still protect you. If you signed a later agreement that reduced your severance without receiving anything new in return, it may be unenforceable, and your earlier, more favourable terms may still govern. For more on this, see our guide to Employment Contract Review.
  3. Candid leadership feedback isn’t cause. Executives are often expected to deliver frank assessments during a restructuring. Relaying staff concerns respectfully doesn’t give an employer licence to dismiss you for cause. Learn more in our guide to Executive Compensation.

Frequently Asked Questions

What is “fresh consideration” in employment law?

A new, genuine benefit, such as a bonus, raise, promotion, enhanced benefits, or extra vacation, given in exchange for agreeing to new contractual terms. Without it, significant amendments, especially to severance clauses in a contract, are unenforceable.

Can an employer claim I “abandoned” my job if they locked me out?

No. Job Abandonment requires a clear, unequivocal intention by the employee to walk away. Cutting off access and preventing someone from working points toward an employer-led dismissal, not abandonment.

What counts as “insolence” serious enough to justify termination for cause?

Genuinely abusive, derisive, or threatening conduct directed at management. Not candid, respectfully delivered feedback, offered in a business meeting.

How Pelsmakher Law Can Help

Navigating executive transitions, contract renegotiations, and workplace restructurings requires strategic precision. Whether you’re an employer looking to update employment contracts lawfully or an executive facing a possible dismissal, early legal advice matters. Review our Employment & Labour practice areas to see how we assist both businesses and executives.

Book a confidential consultation with Pelsmakher Law, or visit our Blog page for more legal updates and insights.