The Ontario Court of Appeal has released an important decision for employers offering Restricted Stock Units (“RSU”) and other equity-based compensation.

In Wigdor v. Facebook Canada Ltd., 2026 ONCA 572, the Court held that language stopping RSU vesting immediately upon termination was unenforceable because it purported to stop vesting during the employee’s statutory notice period, contrary to Ontario’s Employment Standards Act, 2000.

What happened?

Daniel Wigdor’s compensation included RSUs issued by Meta Platforms, Inc.. The RSU agreements stated that unvested awards would be forfeited when employment ended and would not continue to vest during any statutory, contractual, or common law notice period.
The Court concluded that continued vesting was a term or condition of employment that could not be altered during the statutory notice period. As a result, the forfeiture language was void.

Without enforceable language removing the common law entitlement, Daniel Wigdor was awarded approximately US$4.7 million for RSUs that would have vested during his 10-month reasonable notice period.

Key Takeaways

Employers that offer RSUs, stock options, bonuses, or other incentive compensation should:

  • review provisions that trigger forfeiture immediately upon termination;
  • ensure vesting and participation continue for at least the statutory notice period where required;
  • avoid assuming that a general ESA saving clause will cure otherwise non-compliant language;
  • review employment agreements and incentive plans together; and
  • calculate potential equity exposure before finalizing a termination package.

The decision also confirms that prior service arising from a sale of business may affect the enforceability of a termination clause and cannot be overlooked when preparing new employment agreements.

Conclusion

The cost of getting equity compensation language wrong can be significant. Employers should review their employment agreements and equity plan documents now, rather than waiting until a termination places those provisions under scrutiny.

If you would like to discuss the any of the above or need any other assistance, please don’t hesitate to reach out to speak to an e2r® Advisor.