Vesting Doesn’t Stop At The Door: Ontario Court Of Appeal Awards $4.7M In RSU Damages In Wigdor v. Facebook Canada Ltd.

August continues to be a busy month for the Court of Appeal of Ontario with another significant decision for Ontario employers and employees.¹ In Wigdor v Facebook Canada Ltd., the Court of Appeal provided clarification on employees’ entitlement to equity-based compensation upon termination. Specifically, the court allowed the employee’s appeal and increased his wrongful dismissal damages by approximately US$4.7 million to account for Restricted Stock Units (“RSUs”) that would have vested during the 10-month common law reasonable notice period.

Dr. Wigdor joined Facebook Canada in 2020 and as part of his compensation, he was granted RSUs valued at US$7.5 million that vested quarterly over a four-year schedule. Facebook Canada terminated Wigdor’s employment in December 2023 and offered him only his statutory minimum requirements under the Ontario Employment Standards Act, 2000 (“ESA”) and required him to sign a release that included a waiver of his unvested RSUs in exchange for additional termination entitlements contemplated by his employment agreement. In the lower court’s decision, the judge found that the termination provision in Wigdor’s employment agreement violated the ESA and awarded him 10 months of common law reasonable notice, but denied damages for the unvested RSUs on the basis that the RSU plan was enforceable and did not contravene the ESA.

The Court of Appeal reversed the lower court’s ruling on the RSUs, holding that sections 60 and 61 of the ESA must be read together. Section 60(1)(a) prohibits employers from altering “any term or condition of employment” during the statutory notice period, and section 61(1)(a) requires that pay in lieu of notice be calculated as “a lump sum equal to the amount the employee would have been entitled to receive under section 60”. Because the RSU Agreement, which provided that “all unvested RSUs shall be forfeited to the Company forthwith” upon termination, purported to alter a term or condition of employment during the notice period, it contravened section 60(1)(a) of the ESA.

Additionally, the Court of Appeal found that the RSU’s were structured as employment compensation and therefore the ESA applied in assessing the enforceability of the RSU plan. Notably, the Court of Appeal did not decide whether equity-based compensation constitutes “wages” under the ESA, as it held that the issue was better left to an appeal where the answer to that question was determinative.

Key Takeaways for Employers

1. Terms in RSU plans that result in forfeiture of unvested RSUs on termination must be drafted carefully: Employers should review RSU plans and employment agreements to ensure that they are compliant with the ESA and do not require forfeiture of unvested RSUs during the ESA statutory notice period.

2. Employment Agreements and Equity-Compensation Plans will be read in tandem: Courts will look to all contracts that govern an employee’s compensation when determining entitlements on termination². Employers should have employment agreements and equity-compensation plans reviewed by legal counsel to ensure that when read together, they are compliant with the ESA.

Footnotes

1. See our article on Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568 here.

2. See also our recent article here in which the Ontario Court of Appeal held that in certain circumstances, disputes regarding an employee’s equity rights will be governed by the equity agreements, separate and apart from the employee’s employment terms and rights.