In a recent decision, Wigdor v Facebook Canada Ltd, 2025 ONSC 4051, the Ontario Superior Court upheld the enforceability of restricted stock unit (“RSU”) agreements that provide for the forfeiture of unvested equity upon termination even during the statutory notice period under the Ontario Employment Standards Act, 2000 (“ESA”).
Background
Dr. Daniel Wigdor was a former employee of Facebook who brought an application to the Court seeking relief concerning his termination of employment, including an order to be granted the value of his forfeited RSUs and other benefits which would have vested during the notice period.
During his employment, he was entitled to RSUs governed by two different agreements, including: (1) a 2020 RSU agreement which contemplated termination of RSU vesting during the ESA notice period and (2) 2021-2023 RSU agreements which contemplated forfeiture of RSUs “forthwith” and no entitlement to RSUs which may vest during a period of statutory notice.
Wigdor’s Arguments
Wigdor claimed that both RSU agreements were invalid and unenforceable, arguing that the 2021-2023 RSU agreements were misleading to employees and that both RSU agreements were unlawful because they would require employees to forfeit their RSUs even if their employment was terminated as a reprisal or for other prohibited reasons under the ESA.
1. Ambiguity in RSU Forfeiture Language
Wigdor argued that because the ESA does not expressly require RSUs to vest during the statutory notice period, that by including wording which suggests that the legislation could require vesting, this imports an ambiguous term into the RSU agreements, rendering the entire provision void.
The Court found that the language which stated that vesting would continue only if explicitly required by applicable employment standards legislation was neither misleading nor uncertain and was no different than a termination provision that provides employees in a with or without cause termination with “only the minimum payments and entitlements, if any, owed to you under the [ESA] and its Regulations.”
2. Violation of ESA Section 61 Benefits During Notice Period
Wigdor argued that the RSU forfeiture in the agreements breached the ESA’s requirement to maintain benefits during the statutory notice period as stipulated under Section 61.
The Court confirmed that RSUs are not “wages” or “benefits” as defined under Section 61 of the ESA and therefore there is no statutory requirement that RSUs continue to vest during the minimum notice period.
3. The RSU Agreements Unlawfully Contracted Out of the ESA
Wigdor also argued that the following provisions in both the 2020 and the 2021-2023 agreements were void and unenforceable because:
(a) The 2020 RSU Agreement provided that all RSUs will be forfeited even if the termination is “later found to be … in breach of employment laws”; and
(b) The 2021-2023 RSU Agreements provided that all RSUs will be forfeited even if the termination is “later found to be invalid or unlawful.”
His argument was that the provisions violated the ESA because they purported to remove an employee’s entitlement to compensation, even in circumstances where they have been unlawfully terminated, for example, after a job-protected leave or as a reprisal.
The Court found that the RSU agreements were valid and enforceable because they were structured as standalone contracts, separate and distinct from the employment agreement. Wigdor’s RSU entitlements were independent of any relief he may have been entitled to under his employment agreement, the ESA or common law.
Takeaways
Employees who are offered RSUs or other equity compensation should have the agreement reviewed by an employment lawyer to understand their rights and avoid unexpected forfeiture on termination. Employers should have their RSU and equity plans reviewed to ensure they are clear, enforceable, and compliant with the law.
Contact JPAK Employment Lawyers for more information.
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Date: Aug 15, 2025
