By: Julius Melnitzer | July 31, 2025
In a recent case, the Supreme Court of Canada is being asked to consider a question that has long divided courts and vexed employers: are agreements that forfeit employees’ unvested equity-based compensation on termination enforceable, even if the vesting is scheduled to occur during the reasonable notice period?
“The issue is an important one because so many companies’ compensation structures for high-level management are based on some form of equity compensation,” says Robert Stack, a lawyer at Wilson Laycraft Barristers and Solicitors. “The problem for employers and employees is that the jurisprudence is more or less equally divided on whether agreements that limit stock options and other equity rights on termination or during a notice period are enforceable.”
Stack, who represents both employers and employees in wrongful dismissal cases, is counsel to Bruce Kirke, who worked for Spartan Controls Ltd. for 25 years before the company fired him.
Kirke sued for wrongful dismissal. The trial judge awarded him 20 months’ notice, during which period he was entitled to damages for the loss of his base pay, benefits and quarterly bonus payments.
But the trial judge ruled that Kirke couldn’t claim damages related to the loss of payments he would’ve received during the reasonable notice period as a participant in Spartan’s shareholder profit-sharing agreement. MORE . . .
Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at julius@legalwriter.net or on his website.
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