Do Stock Options Implode on Dismissal?

Dan Wilband 2026-03-03

Your stock options might vanish the day you are fired. Last year, two Ontario courts reached opposite conclusions on whether that’s legal.

In 2025, two decisions gave two different answers to the same question: what happens to your unvested RSUs and stock options when your employer lets you go?

In Wigdor v. Facebook Canada, a director-level employee was terminated after more than three years. His RSU grants were worth millions. The court struck down his employment agreement’s termination clause for violating the ESA and awarded 10 months of common law notice. But on the RSUs, it sided with the employer, holding that RSUs were not “wages” or “benefits” under the ESA, and that the forfeiture provisions in the standalone RSU agreements were clear and enforceable. The employee lost his unvested equity entirely.

Then just a few months later, came Liggett v. Veeva Software Systems. A senior product manager was terminated after four and a half years. A significant portion of his pay came through stock options and RSUs. The employer relied on plan language cutting off vesting the moment the employee stopped “actively providing services.” But the court was not persuaded. It found the language ambiguous, in violation of the ESA, and short of the clarity threshold set by the Supreme Court of Canada in Matthews v. Ocean Nutrition. The employee was awarded over $90,000 in equity compensation.

Same province. Same court. Opposite outcomes.

What made the difference? In Liggett, the court applied the same ESA-compliance framework to the equity plan that it would apply to any termination clause. The forfeiture language terminated equity compensation on the last day of active work, conflicting with the ESA’s requirement that it continue through the notice period. Under this analysis, equity clauses get the same scrutiny as every other termination provision.

In Wigdor, the court took a different line, treating the standalone RSU agreements as separate from the employment contract and holding that the ESA’s protections did not extend to equity vesting.

Wigdor is now under appeal. The Ontario Court of Appeal’s decision in 2026 could reshape how equity compensation is treated on termination across the province (and country).

If you are an employer, and the language in your equity plans is boilerplate, it is a litigation risk. If you are an employee, don’t assume you know what you are entitled to until someone reviews those agreements line by line.

It is worth noting what the court in Liggett said about the contract itself, i.e., that it was so convoluted an employee would need to cut and paste between sections just to understand what applied. That should resonate with many employers relying on patchwork template contracts, drafted for different jurisdictions, and applied to employees without much thought.

The stakes are too high to guess, and the fine print matters.