IFW October 2026 Newsletter: Wigdor v. Facebook: RSU Vesting Required During ESA Termination Notice Period

The Ontario Court of Appeal (“ONCA”) recently released its decision in Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 (“Wigdor”) following on the heels of its decisions in Baker v. Van Dolder’s Home Team Inc. (“Baker”) and Li v. Wayfair Canada (“Li”) discussed in an earlier newsletter. The decisions in Baker and Li established a move away from technical interpretations of contractual language which could be argued to be in breach of the Ontario Employment Standards Act, 2000 (the “ESA”). Wigdor, however, confirms that the courts will still insist on a strict interpretation with respect to statutory compliance with the ESA. In Wigdor, the ONCA held that the provisions in the Restricted Stock Unit (“RSU”) Agreement which provided for immediate forfeiture of all unvested RSUs on termination, were in breach of the ESA requirement not to alter “any term or condition of employment” during the statutory termination notice period. As a result, Dr. Wigdor was awarded approximately $4.7 million USD in damages for the value of his RSUs which would have vested during the common law reasonable notice period.

Background

In 2020, Facebook acquired Dr. Wigdor’s company and offered Dr. Wigdor employment as part of the transaction. Dr. Wigdor’s employment agreement with Facebook provided that he would receive a grant of 43,380 RSUs valued at approximately $7.5 million USD scheduled to vest over four years. Facebook terminated Dr. Wigdor’s employment without cause in December 2023. Facebook relied on the terms of the RSU Agreement which stated that vesting of all RSUs stopped upon termination of employment, and did not continue during any contractual, statutory or common law period, to assert that all of Dr. Wigdor’s unvested RSUs were forfeited on the date of termination.

The ONCA’s Decision

On  appeal, the ONCA interpreted sections 60 and 61 of the ESA, which it held must be read together, to require continued vesting of the RSUs during the minimum statutory termination notice period. Section 60 of the ESA states that an employer shall not alter “any term or condition of employment” during the ESA termination notice period. Section 61 of the ESA requires that when payment in lieu of notice of termination is provided, it must be as “a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section”. In other words, the lumpsum must be equal to the amount the employee would have received if they had been given working notice under s. 60. Accordingly, the terms of the RSU Agreement, which did not provide for continued vesting during the ESA termination notice period, were void and therefore unenforceable. As there was no enforceable contractual language to remove Dr. Wigdor’s common law rights, he was entitled to damages in the amount of $4,711,647.29 USD for the RSUs that would have vested during the common law reasonable notice period.

The ONCA also rejected the arguments that the RSU Agreement was not connected with Dr. Wigdor’s employment and so not subject to the ESA; and that the savings provision in the RSU Agreement could cure the invalidity of the language that was in breach of the ESA.

Summary

RSUs and other equity awards granted as part of an employee’s compensation will be considered a “term or condition of employment” for the purposes of the ESA. As such, contractual language in any equity plans or agreements must incorporate minimum ESA termination notice periods with respect to any entitlements granted to an employee. In particular, there should be specific language that provides for continued vesting of RSUs or other equity during the ESA statutory termination notice period.