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On 7 August 2026 the Court of Appeal for Ontario increased a wrongful dismissal award by more than US$4.7 million, and every cent of it was equity that would have vested during a ten-month notice period. The decision matters well beyond its size, because it establishes a route to equity compensation that does not depend on the wording of the plan at all.
Updated August 2026
On a 10-month common law reasonable notice period
Because the forfeiture provision is void, the common law fills the gap, and the employee recovers the value of everything that would have vested across the full common law notice period.
The Court also upheld the finding that the termination clause itself was void, under section 9 of the ESA, because it ignored service that carried over on the sale of the employee’s business.
Dismissed with unvested equity, and told it was forfeited on your last day?
That forfeiture may be unenforceable regardless of what the plan says. Where the value is significant, this is worth assessing before you sign anything, and certainly before you accept that the equity is gone.
What happened
Dr. Daniel Wigdor is a tenured professor of computer science at the University of Toronto, working in human-computer interaction. In 2011 he founded Chatham Inc., a technology consulting business, which began providing services to a Meta subsidiary in 2016. By 2018 he was overseeing 20 Chatham staff and 150 members of Meta’s Reality Labs team.
In 2020 Meta bought Chatham, and the purpose of the acquisition was to bring Dr. Wigdor and his team inside Meta. The share purchase agreement was structured to keep them there. Meta held back half the purchase price against Dr. Wigdor and at least three key employees remaining for three years, and granted him 43,380 restricted stock units valued at US$7.5 million, vesting over four years.
He began at Facebook Canada on 12 September 2020 as Director, Research Science, on a base salary of $232,000 later rising to $253,100.37, working 80 percent of full time while keeping his university position. The RSUs were governed by Meta’s 2012 Equity Incentive Plan, with further terms in four separate RSU Agreements covering the 2020, 2021, 2022, and 2023 grants.
Facebook Canada terminated his employment by letter on 4 December 2023, effective 8 December. The letter offered his ESA minimums, being 8 weeks of pay in lieu and 12.5 weeks of statutory severance, with supplemental amounts available if he signed a release.
He did not sign it. The release contained a term preventing him from disputing the forfeiture of his unvested RSUs. The employer then did not pay even the statutory minimums for ten months, and only did so after he commenced his application.
Why the termination clause failed
The employer cross-appealed on this point and lost. The defect is instructive, because it has nothing to do with the wording arguments that have dominated Ontario termination clause litigation.
The agreement provided that Dr. Wigdor could be terminated on two weeks’ notice during his first three months. It also stated that no employment with a previous employer counted toward continuous employment with the company, subject to a narrow carve-out recognising his Chatham service from 1 July 2011 for limited purposes only.
That is contrary to section 9 of the ESA. Where a business is sold and an employee continues with the purchaser, employment is treated as continuous. Dr. Wigdor therefore arrived at Facebook Canada already entitled to be treated as having nine years of service for the purposes of statutory notice. A clause permitting two weeks’ notice in his first three months was below the statutory floor from his very first day.
The Court applied the standard framework. The common law presumption of reasonable notice can be rebutted only by a contract that clearly provides otherwise, and section 5 of the ESA prevents contracting out of the minimum standards, so a notice provision is enforceable only if it complies. Because the standard of review on contractual interpretation is palpable and overriding error absent an extricable question of law, and the application judge made no such error, the cross-appeal failed.
The RSU holding, and why it is different
This is the part that changes practice.
The usual route to equity compensation during a notice period runs through Matthews v. Ocean Nutrition Canada Ltd.: would the employee have been entitled to the benefit during the notice period, and does the plan language unambiguously take it away. That analysis turns entirely on drafting, which is why employers keep tightening plan wording.
Dr. Wigdor argued a different route, and the Court accepted it.
Section 60(1)(a)
During the statutory notice period an employer shall not alter any term or condition of employment. The obligation is statutory and does not depend on what any contract says.
Section 61(1)(a)
Where pay in lieu is given instead, it must be a lump sum equal to what the employee would have received under section 60 had notice actually been given. Pay in lieu cannot deliver less than working notice would have.
The provisions were incorporated
The RSU Agreements were incorporated by reference into the employment agreement, so their terms were terms of the employment contract rather than a separate arrangement sitting alongside it.
The forfeiture was an alteration
Stopping vesting immediately on termination alters a term or condition of employment during the notice period, contrary to section 60(1)(a). The provisions therefore contravene the ESA and are unenforceable.
The consequence is the familiar one from Machtinger onward, applied to equity for the first time at this scale. A provision that breaches the ESA is void rather than read down, so nothing contractual remains to limit the entitlement, and the common law supplies it in full. A breach measured against an eight-week statutory notice period produced an award calculated across a ten-month common law one.
The Court also held that the application judge erred by assessing ESA compliance only under section 61, without considering section 60, and by misinterpreting section 61 itself.
Holding unvested RSUs, options, or a long-term incentive plan?
Whether the plan language is watertight may no longer be the question. Where a forfeiture provision is incorporated into your employment agreement and cuts off entitlements during the notice period, it may be void on statutory grounds.
Have Your Equity Assessed
Or call: 1-800-771-7882
Read alongside Baker, released the day before
On 6 August 2026 the Court of Appeal released Baker v. Van Dolder’s Home Team Inc., upholding two termination clauses, rejecting the arguments built on “at any time” and “for any reason”, and warning courts against straining to find ambiguity. It was widely read as the end of a six-year run of employee successes.
The next day the same court struck one down.
| Baker, 6 August | Wigdor, 7 August | |
|---|---|---|
| Argument | Particular words: “at any time”, “for any reason” | Substantive shortfall: notice below the statutory floor |
| Outcome | Clauses upheld | Clause void |
| Reason | Contracts preserved statutory minimums when read as a whole | Contract ignored service deemed continuous on a sale of business |
The two decisions are consistent, and together they say something more precise than either does alone. Arguments about suspect phrasing are closed. Arguments that a clause actually delivers less than the ESA requires are very much open, and remain the strongest ground for challenging a termination provision.
Punitive damages: ten months of non-payment was not enough
This is the part of the appeal Dr. Wigdor lost, and it is worth understanding because the facts were unattractive.
The application judge found the circumstances suggested more than an unintentional administrative error while falling short of reprehensible conduct. She described the employer’s evidence explaining the ten-month delay as inadequate and vague, and inferred from the timing that the respondents were prepared to let his entitlements languish. Her observation was that they were plainly interested in negotiating a release, and to that extent he had their attention, yet were curiously passive about his other statutory entitlements. She nonetheless concluded the conduct, while dilatory, did not reach the level of harsh or malicious.
The Court of Appeal declined to interfere. Punitive damages are restricted to advertent wrongful acts so malicious and outrageous that they deserve punishment on their own, following Honda Canada Inc. v. Keays. The application judge had applied that standard correctly, and although her finding approached a finding of intentional misconduct, it was not one. Given the discretionary nature of the assessment and the factual findings underlying it, there was no reviewable error.
The practical lesson is that punitive damages remain genuinely exceptional. Even a ten-month failure to pay statutory minimums, paid only once proceedings began, did not clear the bar. See our article on bad faith, aggravated and punitive damages.
What it means for employees
Forfeited equity may not be forfeited
A provision cutting off vesting on your last day may be unenforceable, and if it is, the entitlement runs across your full common law notice period. Where equity is a meaningful part of your compensation, this is the largest single item in most executive severance disputes.
Do not sign a release that concedes it
Dr. Wigdor recovered US$4.7 million because he refused a release requiring him to give up the RSU dispute. Had he signed, the point would never have been argued. See what a release gives up.
Service can carry across a sale
If your employer acquired the business you worked for, your earlier service may count from your first day with the purchaser, and a contract saying otherwise may be void. See Manthadi v. Asco Manufacturing.
The statutory argument is separate
Plan wording tightened after Matthews may still fail, because section 60(1)(a) does not care how carefully the forfeiture was drafted. It is worth a second look at plans previously assessed as watertight.
What it means for employers
Three exposures follow, and none is addressed by better drafting of the forfeiture language itself.
Incorporation by reference cuts both ways. Pulling an equity plan into the employment agreement made its termination provisions terms of that agreement, and brought their defects with them. Whether the plan should be incorporated at all is now a live question.
Service on an acquisition is a statutory matter. A contractual statement that prior service does not count, or counts only for limited purposes, does not displace section 9 where the business was sold. Any agreement issued to employees acquired with a business needs checking against actual deemed service rather than against their start date with the purchaser.
And delay in paying statutory minimums is dangerous even where punitive damages fail. The employer here avoided punitive damages, but only after a finding that its explanation was inadequate and vague and that it had been content to let entitlements languish. That is not a result worth relying on.
If you hold unvested equity
What to establish
- Whether the equity plan or award agreement is incorporated by reference into your employment agreement, since that is what brought it within the ESA analysis here.
- What the plan says happens to unvested awards on termination, and whether it distinguishes between the termination date and the end of the notice period.
- How much would have vested across a realistic notice period, since that is the measure of the claim rather than the total unvested balance.
- Whether your employer acquired the business you previously worked for, and what service your agreement recognises.
- Whether any release you have been offered requires you to give up an equity dispute, which is the term that mattered most in this case.
- Whether your statutory minimums have actually been paid, and when.
- The dates, since a wrongful dismissal claim generally carries a two-year limitation period.
Frequently asked questions
What did the Court of Appeal decide in Wigdor v. Facebook Canada?
It allowed the employee’s appeal except on punitive damages, dismissed the employer’s cross-appeal, and increased his damages by US$4,711,647.29 to reflect the value of restricted stock units that would have vested during a 10-month common law reasonable notice period. The termination provisions of the RSU agreements were held to contravene the Employment Standards Act, 2000 and to be unenforceable.
Can my employer cancel unvested RSUs when I am terminated?
Possibly not. Where the plan or award agreement is incorporated into your employment agreement, a provision stopping vesting immediately on termination alters a term or condition of employment during the statutory notice period, contrary to section 60(1)(a) of the ESA. That makes the provision unenforceable, and the entitlement is then measured across the full common law notice period.
How is this different from Matthews v. Ocean Nutrition?
Matthews asks whether the employee would have been entitled to the benefit during the notice period and whether the plan language unambiguously removes it, so the analysis turns on drafting. Wigdor adds a statutory route: section 60(1)(a) prohibits altering terms of employment during the statutory notice period regardless of how carefully the forfeiture provision was drafted. Plans tightened after Matthews may still fail on this ground.
Why was the termination clause void in this case?
Because it allowed termination on two weeks’ notice during the first three months of employment, when under section 9 of the ESA the employee’s service with the business Meta had acquired carried over, meaning he was entitled to be treated as having nine years of service from his first day. The clause therefore fell below the statutory minimum immediately.
Does Wigdor contradict Baker v. Van Dolder?
No, and the two were released a day apart. Baker closed off arguments based on particular phrases such as “at any time” and “for any reason”. Wigdor shows that arguments based on a clause actually providing less than the ESA requires remain fully available. Read together, they narrow the grounds for challenging a clause without eliminating them.
Does service carry over when a business is sold in Ontario?
Generally yes for employment standards purposes. Where a business is sold and the employee continues with the purchaser, section 9 of the ESA treats employment as continuous. A contractual term stating that prior service does not count, or counts only for limited purposes, does not displace that, and a notice provision built on the employee’s start date with the purchaser may be void as a result.
Why were punitive damages refused despite the delay in payment?
The application judge found the conduct dilatory but not harsh or malicious, and although she described the employer’s explanation for the ten-month delay as inadequate and vague, she stopped short of finding intentional misconduct. Punitive damages require advertent wrongful acts so malicious and outrageous as to deserve punishment on their own, following Honda Canada Inc. v. Keays, and the Court of Appeal saw no reviewable error in a discretionary assessment resting on those findings.
What should I do if I was told my equity was forfeited?
Do not sign a release that requires you to give up the dispute, since that is precisely what the employee here refused to do and it is why the point could be argued at all. Establish whether the plan is incorporated into your employment agreement, what would have vested across a realistic notice period, and how the forfeiture provision is worded. Where the value is significant this warrants advice before anything is accepted.
How Achkar Law helps
Achkar Law acts for employees in Ontario and British Columbia on dismissal claims where equity compensation is in issue, including restricted stock units, options, and long-term incentive plans. That work turns on how the plan interacts with the employment agreement, what would have vested across a realistic notice period, and whether the forfeiture provision survives the ESA.
See our executive severance services, our wrongful dismissal lawyers and severance pay lawyers, or our Toronto employment lawyers if you are in the GTA.
Told your unvested equity was forfeited on your last day?
After this decision that is no longer a settled proposition, and where equity forms a real part of your compensation it is usually the largest item in the negotiation. The one step to avoid is signing a release that concedes it.
Call us at 1-800-771-7882 or fill out the form below for a confidential consultation.
This article summarises a court decision and provides general information about Ontario employment law. It is not legal advice. Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 was released on 7 August 2026 and may be subject to a further application for leave to appeal. Whether it assists in a particular case depends on the wording of the employment agreement and equity plan and on the facts. An employment lawyer can advise on your specific situation.
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The post Lessons from Wigdor v. Facebook Canada Ltd. (2026 ONCA 572) appeared first on Achkar Law.