For some employees, restricted stock units (RSUs) are an important part of their compensation. Most RSU agreements say that unvested units are forfeited the moment your employment ends. The Ontario Court of Appeal’s recent decision in Wigdor v. Facebook Canada Ltd., 2026 ONCA 572, shows that this wording may not be enforceable, and that employees may be entitled to the RSUs set to vest over their severance period.
Background
Dr. Daniel Wigdor joined Facebook Canada in 2020 after Meta bought the technology consulting company he founded. As part of his compensation, he received 43,380 RSUs valued at about US$7.5 million, vesting quarterly over four years.
His RSU agreements outlined that unvested RSUs would be forfeited on termination and that vesting would not continue during any severance period.
Facebook Canada terminated Dr. Wigdor’s employment without cause in December 2023. Facebook offered him a severance package on the condition that he sign a release giving up his unvested RSUs. Dr. Wigdor declined the offer and went to court.
The lower court found that the termination clause in his employment contract was unenforceable and awarded him 10 months of severance. However, it upheld the RSU forfeiture provisions, so he received nothing for his unvested RSUs.
The Court of Appeal’s Decision
The Court of Appeal held that Dr. Wigdor was entitled to the RSUs that vested over his statutory notice period.
Under Ontario’s Employment Standards Act, 2000 (ESA), an employer is prohibited from changing an employee’s terms of employment during their minimum termination notice period. The Court found that Dr. Wigdor’s RSUs were part of his compensation package and therefore a protected term of his employment.
Because the RSU agreements discontinued vesting immediately on termination, they changed a term of employment over the termination notice period – something the ESA prohibits. That made the forfeiture language inconsistent with the ESA and therefore unenforceable.
With the forfeiture language invalidated, the Court held that Dr. Wigdor was entitled to the value of the 9,405 RSUs that would have vested during his full 10-month common law severance period. He was awarded US $4.7 million in RSUs.
Takeaways for Employees
If your compensation includes RSUs or similar equity, keep the following in mind:
- Forfeiture language is not the final word. If it does not protect your minimum ESA entitlements, it may be unenforceable.
- Seek legal advice to assess the enforceability of your RSU agreements. Do so before signing a release. Severance offers often ask you to give up unvested equity. If you sign a release without legal review, you may be giving up significant entitlements.
Terminated With Unvested RSUs?
If you have been dismissed and your compensation includes RSUs, stock options or other incentive pay, have your documents reviewed by an experienced employment lawyer before accepting any offer. Contact Turnpenney Milne LLP to find out what you may be entitled to.
Written By: Robin Nyamekye