FTR Now

Ontario Court of Appeal Case is a Warning to Employers to Review Their Incentive Plans

· 5 min read By: Natasha D. Monkman, Evan Howard, Alex Lemoine, Bayley Winkel

FTR Now

Ontario Court of Appeal Case is a Warning to Employers to Review Their Incentive Plans

Date: August 11, 2026

A defect in Meta’s Restricted Share Unit (RSU) agreements has resulted in an additional US$4.7 million award to a former employee. In Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 (Wigdor), the Ontario Court of Appeal found that the agreements did not preserve the employee’s minimum statutory entitlements during the statutory notice period. The defective limitations were therefore unenforceable, leaving Meta exposed to damages for RSUs that would have vested over the employee’s much longer common-law reasonable notice period.

The decision has significant implications for employers that provide equity awards or other incentive plans. Language that fails to comply with minimum employment standards—even over a relatively short statutory notice period—may prevent an employer from limiting compensation entitlements throughout the full common law reasonable notice period. Employers should review their plans and award documents before the same drafting issue produces a similarly significant claim.

Background

Dr. Wigdor joined Facebook Canada after Meta acquired his company, Chatham Inc. His compensation included RSUs granted under Meta’s 2012 Equity Incentive Plan and annual RSU agreements. After his employment was terminated without cause, he claimed the value of RSUs that would have vested during the applicable reasonable notice period.

The Superior Court awarded 10 months’ reasonable notice but upheld the RSU forfeiture provisions.

Decision of the Court of Appeal

The Court of Appeal reversed the Superior Court’s result on the RSUs and upheld the reasonable notice that was previously awarded.

RSUs as a “Term or Condition of Employment”

The Court said sections 60 and 61 of the Employment Standards Act, 2000 (ESA) must be read together. During the ESA notice period, an employer cannot reduce pay or change another term or condition of employment.
In simple terms, an employee should be in the same financial position whether the employer gives working notice or ends employment immediately and provides pay in lieu of notice.

The Court found that the RSUs were part of Dr. Wigdor’s employment compensation package. As such, these RSUs were a protected part of his “terms and conditions of employment” that could not be changed or reduced during the minimum statutory notice period.

How an ESA defect became a US$4.7 million award

Using the Supreme Court of Canada’s framework from Matthews v Ocean Nutrition, the Court of Appeal applied the following test:

  1. Would Dr. Wigdor have received the RSUs if he had remained employed during the reasonable notice period?
  2. If yes, did the RSU agreements clearly and lawfully take away that right?

The Court found that, had he been provided “working notice”, Dr. Wigdor’s RSUs would have continued to vest during the 10-month reasonable notice period. The Court then found that the RSU agreements did not clearly and lawfully take away that right because:

  1. The 2020 RSU agreement expressly excluded vesting during the statutory notice period
  2. The 2021, 2022 and 2023 RSU agreements said they would preserve rights “explicitly required by applicable legislation.” However, that language was not enough because the ESA does not explicitly mention RSUs, so the saving language was not engaged.

These deficiencies rendered each of the limitations in the RSU agreements entirely void and meant that Meta could not rely on them to limit Dr. Wigdor’s common-law claim.

Dr. Wigdor therefore recovered damages for RSUs that would have vested throughout the full 10-month reasonable notice period—not just the ESA notice period.

Two Additional Lessons

Prior Service Matters

Although the agreement recognized Dr. Wigdor’s prior service with Chatham elsewhere, the termination clause purported to allow termination during his first three months with Facebook Canada on only two weeks’ notice or base pay.

Since Section 9 of the ESA required his prior service to be recognized, this clause was non-compliant.

Neither general saving language nor sophistication on the part of Dr. Wigdor cured the problem.

Transaction-related equity may still be employment compensation

The Court distinguished employee-purchased shares in Mikelsteins v. Morrison Hershfield Limited from RSUs awarded for continued service.

Compensation does not fall outside the ESA simply because it arose in connection with a corporate transaction.

Employer takeaways

Employers should:

  1. Audit existing termination language in equity and incentive plans for provisions that end vesting or participation immediately on termination without respecting statutory notice periods.
  2. Avoid relying on generic saving language. A saving clause that sounds protective may still fail if it preserves only rights that are named specifically in the ESA.
  3. Seek legal advice and carefully review incentive plan provisions prior to terminating an employee with significant incentive plan entitlements. If a contractual limitation is unenforceable, awards vesting during the employee’s potential reasonable notice period, not just the statutory notice period, may become part of the employee’s wrongful dismissal damages.
  4. Pay undisputed statutory entitlements when due. The Court of Appeal upheld the denial of punitive damages here, but Facebook Canada’s 10-month delay in paying statutory entitlements was heavily criticized.

Wigdor does not mean that equity-plan termination language is always unenforceable. Employers can still limit post-termination equity rights. However, the language must first protect minimum statutory entitlements, and only then deal with any additional contractual or common-law notice period in a clear and unequivocal manner. In the face of evolving case law, employers are encouraged to have their equity-plans and related documents reviewed regularly to reduce the risk of significant damage awards.

To learn more about this decision and its broader impact on your workplace, register for our upcoming webinar on August 25th, 2026.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©