CHAUDHRI: Meta employment contract scrutinized in Ontario court

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We often think some things are too big to fail.

A big idea, a big movement, a big company. The bigger they are, the stronger they appear.

Chinks in the armour can’t be seen – unless we take a closer look.

As a lawyer, I dissect contracts drafted and distributed by very well resourced companies that are the titans of their industries.

It is my job to figure out whether or not these contracts hold weight and if they will stand up in court. Of course, one would expect big companies to have ironclad contracts, vetted by an army of legal experts. But what is flat out shocking is that most of the time employment contracts prepared by even the biggest companies in the world contain errors that render them toothless.

Today, I will tell you about a Facebook Canada (Meta) contract recently scrutinized by an Ontario court.

Daniel Wigdor, a tenured professor at the University of Toronto, founded Chatham Inc. – a company that provided technology consulting services to financial, legal and technological firms.

In 2020, Meta acquired Chatham Inc. in a share purchase agreement. Wigdor was paid $20 million for the shares and was also given a significant amount of Meta restricted share units on the closing.

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As part of the deal, Wigdor was hired at Meta as a Director of Research Science with a base salary of $253,100.37 with additional perks and benefits. Wigdor managed a team of 150 people until his termination in December 2023. He was 44 years old at that time.

In Wigdor’s termination letter, Meta offered him entitlements consistent with what was in his employment agreement at less than roughly five months of pay. Wigdor sued for wrongful dismissal damages.

At a hearing of his case this year, Superior Court Justice Janet Leiper ruled that Facebook Canada’s termination clause violated employment standards legislation and that Wigdor was entitled to wrongful dismissal damages under the common law.

The court also noted that the employer acknowledged it made “mistakes” post termination, including prematurely terminating the Wigdor’s benefits and failing to pay his severance, which Meta characterized as an “administrative error.”

In determining the length of the notice period, the court accepted there were few comparable Canadian jobs that could offer similar pay to a highly skilled employee like Wigdor. He was awarded 10 months of reasonable notice.

This case is immensely interesting for a few reasons. Firstly, the termination clause struck down by the court was from a 2020 contract. Even recently drafted termination provisions may still run afoul of current laws.

Secondly, Wigdor was paid a huge sum on the acquisition of his company, Chatham Inc. While the court factored in the large, multi-million dollar payment, the court still awarded reasonable notice of 10 months after his three-and-a-quarter years at Meta.

And lastly, big companies fail in court all the time. Contracts are consistently read in favour of employees and any error in the drafting of a contract will be read against the well resourced company that drafted it.

The lesson? Bigger companies have bigger blind spots that are routinely laid bare in court.

Have a workplace question? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

The content of this article is general information only and is not legal advice.