University of Toronto professor fired by Facebook Canada wins significant legal victory
A University of Toronto professor fired by Facebook Canada has won a significant legal victory at the Ontario Court of Appeal, with a ruling that could have wide-reaching implications for how tech companies structure equity compensation in employment agreements.
In a decision released Aug. 7, the court ordered Facebook Canada and its parent company Meta Platforms to pay Daniel Wigdor US$4.7 million in restricted stock units (RSUs) that would have vested during his wrongful dismissal notice period — compensation that Meta had argued it was not required to pay.
Wigdor, a tenured computer science professor specializing in human-computer interaction, founded a technology consulting firm called Chatham Inc. in 2011. By 2018, he was managing roughly 150 members of Meta's "Reality Labs" team through his company.
Minimum statutory entitlements
In 2020, Meta purchased Chatham in a deal specifically designed to bring Wigdor and his team in-house. As part of the arrangement, Wigdor became director of research science at Facebook Canada at a base salary of $232,000 (later raised to $253,100).
A central feature of his compensation was a grant of 43,380 RSUs in Meta, valued at US$7.5 million, vesting over four years.
Facebook Canada terminated Wigdor's employment on Dec. 4, 2023, effective Dec. 8. He was offered minimum statutory entitlements plus additional severance in exchange for signing a release — but the release required him to accept the forfeiture of his unvested RSUs. He refused to sign.
The company did not pay him his basic statutory entitlements until 10 months later, only after he had launched the legal application that became the basis of this appeal.
The RSU agreements that Wigdor signed contained clauses stating all unvested RSUs would be immediately forfeited upon termination, with no continued vesting during any notice period — whether statutory, contractual, or at common law.
A lower court judge had sided with Meta on this point, finding that the relevant provision of Ontario's Employment Standards Act, 2000 (ESA) — which prohibits employers from altering "any term or condition of employment" during a notice period — applied only to situations where an employee is given working notice, not where they are paid in lieu of notice.
Court of Appeal looks at ESA
The Court of Appeal rejected that reasoning in clear terms.
Writing for a unanimous three-judge panel, Justice Jill Copeland held that sections 60 and 61 of the ESA must be read together, not in isolation. Section 61, which governs pay in lieu of notice, calculates the required lump sum payment as an amount "equal to what the employee would have been entitled to receive under section 60" had working notice been given.
That cross-reference, the court held, means the prohibition on altering employment terms applies equally whether an employee is working out their notice or being paid a lump sum instead.
"Taken together, ss. 60 and 61 are intended to place the employee in the same financial position whether they are given working notice or pay in lieu of notice," Copeland wrote. The RSU forfeiture clauses — by ending vesting at the moment of dismissal — altered a term or condition of employment during the notice period, making them void under the ESA.
Why termination clause also failed
Meta separately argued that Wigdor's employment contract validly limited his entitlements to something less than full common law notice, which would have rendered his RSU claim moot.
That argument also failed. The court upheld the lower court's finding that the contract's termination provisions violated the ESA in a different way: by purporting to allow Facebook Canada to terminate Wigdor on just two weeks' notice during the first three months of his employment, when in fact — because his nine years of prior service with Chatham had to be recognized under the ESA following the acquisition — he was entitled to eight weeks of termination pay plus nine weeks of severance from day one.
Meta argued that the contract should be read to incorporate his prior Chatham service, pointing to language in the agreement referencing his time with Chatham. The court dismissed this interpretation as strained and internally inconsistent. Under Meta's reading, the court noted, the three-month probationary period would have expired back in 2011, making the clause meaningless.
Because the termination clause failed to meet ESA minimum standards, it was void — and Wigdor was entitled to full common law reasonable notice, which the lower court had set at 10 months and which Meta did not challenge on appeal.
Implications for equity compensation
The court declined to rule on a separate and potentially broader question raised by an employer association that intervened in the case: whether equity-based compensation can ever constitute "wages" under the ESA's definition. That question, the court said, is better left for a case where its answer is determinative.
Wigdor's claim for punitive damages — based on Meta's 10-month delay in paying his minimum statutory entitlements — was not awarded. The court found the lower court's characterization of Meta's conduct as "dilatory" but not sufficiently "harsh" or "malicious" to meet the high bar for punitive damages, and saw no overriding error in that finding.
The appeal was allowed in part. The court ordered Meta and Facebook Canada to pay Wigdor an additional US$4,711,647, reflecting the value of RSUs that would have vested during his 10-month notice period. The cross-appeal by Meta was dismissed in its entirety.
