The Ontario Court of Appeal has released an important employment law decision on termination clauses, restricted stock units (“RSUs”), and equity compensation following dismissal.

In Wigdor v. Facebook Canada Ltd., 2026 ONCA 572⁠, the Court held that provisions purporting to stop an employee’s RSUs from vesting immediately upon termination violated Ontario’s Employment Standards Act, 2000 (the “ESA”).

As a result, the employee’s wrongful dismissal damages were increased by US$4,711,647.29, representing RSUs that would have vested during his 10-month common law reasonable notice period.

The decision is particularly important for executives and other employees whose compensation includes equity. It also provides an important warning to employers drafting termination provisions, RSU plans and other incentive compensation arrangements.

What Happened in Wigdor v. Facebook?

Dr. Daniel Wigdor joined Facebook Canada in 2020 as Director, Research Science after Meta acquired his technology business.

His compensation included a substantial equity component, including Meta RSUs that vested over time and formed part of his employment arrangements.

Facebook Canada terminated Dr. Wigdor’s employment without cause in December 2023.

The employment agreement contained provisions intended to limit his termination entitlements. The RSU agreements also provided that unvested RSUs would be forfeited and vesting would cease when his employment ended.

The Superior Court found that the employment agreement’s termination provisions were unenforceable and awarded Dr. Wigdor 10 months of common law reasonable notice. However, the lower court initially concluded that the separate RSU forfeiture provisions prevented him from recovering RSUs that would otherwise have vested during that period.

The Court of Appeal disagreed.

Why Were the RSU Provisions Unenforceable?

The Court of Appeal focused on sections 60 and 61 of the ESA.

During the statutory notice period, an employer cannot reduce an employee’s wage rate or alter another term or condition of employment. Where an employer provides termination pay instead of working notice, the employee must generally receive what they would have received had proper statutory working notice been provided.

The Court concluded that Dr. Wigdor’s RSUs were not simply investments held independently of his employment. They were incorporated into his employment arrangements and formed part of his compensation for continued service.

Accordingly, the RSU provisions could not lawfully terminate his entitlement to vesting during the ESA notice period.

Because the provisions violated minimum employment standards, they also failed to effectively remove his broader common law entitlement to damages for RSUs that would have vested during the reasonable notice period.

Approximately 9,405 RSUs would have vested during that period, resulting in an additional award of $4.71M USD.

For an overview of the distinction between ESA minimum entitlements and common law notice, see our article on termination pay, severance pay and reasonable notice in Ontario⁠.

Why Wigdor Matters for Wrongful Dismissal Claims

The decision illustrates an important principle in Ontario wrongful dismissal law: termination damages are not necessarily limited to salary.

Depending on the employee’s compensation structure, damages may also include:

  • bonuses;
  • RSUs and other equity compensation;
  • stock options;
  • long-term incentive plan payments;
  • commissions;
  • benefits; and
  • other compensation that would have been earned during the notice period.

The starting question is generally whether the employee would have received the compensation had employment continued during the reasonable notice period.

If so, the employer must establish that valid contractual language clearly and legally removes that entitlement.

For executives and senior employees, these issues can substantially affect the value of a termination claim. More information is available through our executive compensation and severance practice⁠.

Does Wigdor Mean All RSUs Survive Termination?

No.

The Court did not decide that every type of equity compensation constitutes “wages” under the ESA, and it did not establish that all RSUs or stock options automatically continue vesting throughout a common law notice period.

The outcome depended on the particular employment agreement, RSU documents and nature of the compensation.

Different considerations may arise where shares are purchased independently by the employee or where equity rights arise primarily from a shareholder agreement rather than the employment relationship.

As a result, the wording of the employment agreement, equity plan and individual grant documents remains critical.

Implications for Employees

Employees should not assume that unvested RSUs, stock options or bonuses automatically disappear because their employment has been terminated.

A proper assessment of a severance package should consider the employee’s entire compensation package, including what would have vested or become payable during the applicable notice period.

Employees receiving significant variable or equity compensation should review:

  • their employment agreement;
  • any termination clause;
  • RSU or stock-option agreements;
  • incentive compensation plans;
  • vesting schedules; and
  • the compensation that would have been earned during the notice period.

Implications for Employers

For employers, Wigdor highlights the importance of ensuring that employment agreements and compensation plans work together.

A termination clause may be carefully drafted, while a separate RSU, bonus or incentive plan contains language that conflicts with minimum ESA requirements.

Employers should review provisions dealing with:

  • the definition of termination;
  • “active employment” requirements;
  • RSU and stock-option vesting;
  • bonus eligibility;
  • statutory notice periods;
  • common law notice; and
  • ESA-compliance or saving provisions.

Particular care should be taken with clauses stating that vesting ends immediately upon termination, regardless of statutory notice obligations.

Employers can learn more about properly structuring employment contracts and workplace policies⁠ and managing terminations and severance⁠.

The decision also follows recent Ontario Court of Appeal guidance on termination-clause enforceability. See our analysis of Baker v. Van Dolder’s Home Team Inc. and Li v. Wayfair Canada ULC: “At Any Time” Is Legal: The Ontario Court of Appeal’s New Ruling Changes Termination Contracts⁠.

Frequently Asked Questions About Wigdor v. Facebook

Can an employer cancel unvested RSUs when an employee is terminated?

Potentially, but the governing employment agreement and RSU plan must comply with the ESA and must clearly and legally limit the employee’s common law rights.

In Wigdor, the provisions stopping RSU vesting immediately upon termination were unenforceable because they improperly eliminated rights that continued during the statutory notice period.

Are RSUs included in wrongful dismissal damages in Ontario?

They can be.

If RSUs would have vested had the employee remained employed during the reasonable notice period, their value may form part of wrongful dismissal damages unless an enforceable contractual provision clearly removes that entitlement.

Are RSUs considered wages under the Ontario Employment Standards Act, 2000?

The Court of Appeal did not decide that question in Wigdor.

Instead, the Court found that the RSUs in this case were a term or condition of employment, which was sufficient to engage the ESA protections at issue.

Do stock options and RSUs always continue during the reasonable notice period?

No.

The result depends on the wording of the employment agreement and equity plan, the nature of the compensation, and whether any contractual limitation is clear and enforceable.

What should an employee do if their RSUs were forfeited after termination?

Employees should review their employment agreement, equity plan, grant documents and vesting schedule before accepting a severance package or signing a release.

The fact that a plan says unvested RSUs are forfeited does not necessarily mean that provision is legally enforceable.

What should employers do after the Wigdor decision?

Employers should review employment agreements together with RSU, stock-option, bonus and long-term incentive plans.

Termination provisions across those documents should be consistent with one another and compliant with the ESA.

Key Takeaway

Wigdor v. Facebook Canada Ltd. confirms that equity compensation can materially affect the value of an Ontario wrongful dismissal claim.

For employees, the decision reinforces the importance of considering all compensation, not simply salary, when evaluating a severance package.

For employers, it demonstrates why termination provisions and incentive-compensation plans must be drafted together and carefully reviewed for ESA compliance.

If you are dealing with the treatment of RSUs, bonuses, stock options or other incentive compensation following termination, contact Pelsmakher Law⁠ to discuss your circumstances.