Elisa Scali
Partner
On-demand webinar
CPD/CLE:
70
Elisa: Good morning. My name is Elisa Scali. I'm a partner with Gowling WLG, practicing in the Employment Law, Labour and Equalities group. I'd like to welcome you today to the fifth webinar of our six part webinar series being presented by the Employment, Labour and Equalities group. If you missed our earlier seminars, not to worry. We will post the links to the recorded sessions in the chat. Today's topic for our webinar is 'Forfeiture and Termination Clauses Under Attack'. Our speakers are Melanie Polowin, Amy Derickx and Cristina Borbely. Melanie is a partner in our Ottawa office. Amy is an associate in our Ottawa office and Cristina is an associate in our Waterloo office. All of our speakers today are members of our Employment, Labour and Equalities group and each of their practices focuses on employment law and all aspects of the employment relationship, from recruitment, termination, workplace safety, accommodation and, of course, advising on COVID related employment issues of which there have been many. COVID has been an especially busy time for employment lawyers, as you can appreciate, but our speakers still had some time to pick up some new hobbies in the midst of COVID, and in Mel's case, some interesting habits. Mel says that every time she goes for walks she talks to trees and hugs them, literally. Cristina has taken up running outdoors but has yet to stop and talk to any trees. But she's working on that. Amy is now saving trees, or trying to, and she got into vermicompost which she had to explain to me, is a worm farm that eats most of her kitchen compost. She assured me it's not as disgusting as it sounds and it does reduce waste for payback. I'm not entirely convinced but we'll see. With that being said, let's get started with our webinar. Just want to let you know if you have any questions during the course of the webinar, please add them to the Q&A, and our speakers will make their very best efforts to address your questions throughout the webinar. So now I'd like to turn it over to Melanie.
Melanie: Thanks, Elisa, and good morning, everybody. What I am going to do right now is set the stage for you to give you, hopefully, a better framework for understanding all of the bad news we're about to talk about. The first thing I want to do is I want to, very briefly, just talk about the terminology in case anybody is not absolutely clear. When we talk about termination clauses, what we're talking about is written contractual provisions in an employment agreement that say, if you are terminated for this reason you get this and that's all you get, no more. When we're talking about forfeiture clauses, what we're talking about are clauses that are sometimes in the employment agreement, sometimes in their commission plans, bonus plans, equity based incentive plans, stock option plans, so on and so forth, and those are the clauses that say if your employment terminates for any reasons this is the bad thing that happens to the entitlement. Of this is all you'll get and no more of this entitlement. These clauses, termination and forfeiture clauses, are the fine print of employment law. So the other thing I want to just briefly talk about is reasonable notice. Many of the people on this call will be familiar with the concept of reasonable notice, but just in case you aren't, in Canada, across Canada, this concept applies. If an employer can terminate an employee at any time, for any reason that's non-discriminatory or non-retaliatory, as long as the employer gives the employee either a reasonable advance notice, or compensation in lieu of notice, or some combination of the both of them. Reasonable notice is the legal default position in Canada. It is not the employment standards minimums. Those set a floor but those are mandatory floors that every employer has to follow. Reasonable notice is the legal default position. So unless an employer has an enforceable termination clause, an enforceable forfeiture clause, the courts are going to apply a reasonable notice approach when it comes to assessing entitlements on termination. There is no formula. There's no blue book. Reasonable notice is a concept that takes into account a whole range of factors. The primary drivers are how old is the employee? How long have they been with you including any bridge service? What's their role and level? Which is partly a title thing, partly a responsibility thing, partly a compensation thing. But other factors come into it as well. It's a complex analysis and it's something that all of our lawyers are well equipped to assist you with. So from a terminology perspective those are the things that are going to be first and foremost what we're talking about today.
So now let's talk about, briefly, the nature of employment law and why it is that courts are so willing to try and kick the crap out of termination and forfeiture clauses. Employment law evolved from contract law but it has far more in common with family law then it does with commercial or business law. It is a law that is about relationships and it is an area of law where the courts are extremely protective of employees. So no written contract will ever be sacred when it comes to the employment context. Think of a written contract as essentially a pre-nup. Everybody is rosy and happy at the time that they sign the pre-nup and then when the marriage falls apart, the gloves come off and people start fighting and try to overturn the pre-nup. That is really the best way to think about employment contracts and plan provisions and things like that. So there are three basic reasons why the courts feel this protection is warranted for employees. Why the benefit of the doubt always goes to employees. First of all, and obviously, normally there's a really significant power and balance between the employer and the employee. So that's one reason the courts want to protect the employees. Second of all, our courts have recognized, and they talk about this often in the case law, that paying work is fundamentally important for most people and our courts don't want to make it easy or inexpensive for employers to take that away from people. So they're going to make employers jump over hurdles to do that. Thirdly, employers use employment agreements for two opposing purposes. Employment agreements and incentive plans and things like that. The written documentation. They use it to attract and incent people. Look at this great stock option plan. Look at this great commission plan. Look at this great bonus plan. They use those to lure people in to come work with them. But at the same time they also use them to protect the employer, if the relationship falls apart, from having to pay out more than the employer wants to pay out. So, yes, look at this great bonus plan, but, if we kick you out and you're not still here on the day we pay out the bonus, sorry, you lose. No bonus. Two opposing purposes, both of which are for the benefit of the employer. Another reason why the court wants to make employers jump over a lot of hurdles if the employer is going to limit what that person actually gets after making all of those beautiful rosy promises. At the end of the day courts don't want to make it easier for employers to give with one hand and take back with the other. So typically employers are the ones who hold the pen on these documents. Typically employees don't have any negotiating power, or very little negotiating power, and all of the documentation is more or less a take it or leave basis. It's not always true but it's often true. Another reason why the courts say, if you want to be able to rely on your own documents, you better make sure they're perfect. It's your responsibility and if there's any problem with the documentation, or how it's signed up, or if you've done something that we think is wrong enough that you shouldn't have the protection of our own contract, then employer, you are going to be out of luck. So that is the mindset that our courts bring to any interpretation of contractual termination and forfeiture provisions. That's one of the reasons why fights about termination and forfeiture provisions go so far in the courts, because the parties are often absolutely determined, you are wrong, wrong, wrong and there's no way I'm giving you a penny and you are wrong, wrong, wrong and I'm not resting until the Supreme Court of Canada awards me all of the things that you had promised to me. So, long story short, legal default position in Canada is reasonable notice and now we are going to ease our way into our first case which is Matthews versus Ocean Nutrition Canada.
This is a case that was a game changer in one way only. Briefly, you had an executive. The relationship ended up falling apart. He sued for constructive dismissal and what they were really fighting about were all of his incentive and variable comp out entitlements, including stock options. So forfeiture clauses is what we were looking at here. Next slide, please. There was, and this is very typical, many of you have these or tell us you want them, one of those, hey, you have to be actively employed at this time in order to get this entitlement. The court ultimately concluded, after interpreting the clauses and looking at them under a microscope, that the clause was not drafted clearly enough so that it applied in the situation of a wrongful dismissal or a constructive dismissal, and even if it did the court said there was some ambiguity in the clause. Any ambiguity, as my colleagues will talk to you about later, is always going to be resolved in favour of the employee. Next slide, please. This is where the game changing aspect of things came in. Before Matthews Supreme Court of Canada's decision, which came out in December 2020, there had been a small trend emerging in some cases where some courts had ruled that an employer had a duty to draw the employee's attention to the forfeiture clauses, and possibly even to explain them, or make sure that the employee understood them. Now all of us, or many of you and we certainly recommend, all of us have those little sign off things. I've had the opportunity to have independent legal advice before I looked at this. I've read this, I understand it, I accept it, I agree to it. Employees signing those things, it's not useless, but it is not a guarantee that a court is going to hold the contract sacred because we know they won't. At the end of the day that trend was emerging, and I was 100%25 convinced that if the Supreme Court of Canada ever got a hold of one of those cases, that the Supreme Court of Canada would slam that thing and squash it like a bug and would never, ever put a burden on employers to call attention to adverse clauses, much less explain them or make sure an employee would understand them. I wasn't totally wrong but I was wrong enough that it actually broke my little employment lawyer heart, and what Matthews Supreme Court of Canada decision did was, first of all, it took us all back to school to remind us that the starting point in any analysis is a reasonable notice analysis. I'm going to come back to that in a second. But the other thing that the court did, and this is what is so game changing is, the court could have talked about this drawing attention to obligation and said, no. That's not there. Or, that's not there except in these tiny little circumstances. The court didn't do that. The court actually said, even if you've perfectly drafted your clauses, even if you followed an appropriate contractual presentation, time to review, sign up process, even if it's got all the usual I've read it, I understood it, I have an opportunity to talk to a lawyer before I signed, I'm signing freely, I agree I'll be bound, even if all of that is there and even if after the contract was signed, or the plan was signed, the employer behaved beautifully to the employee and never did anything wrong to the employee, and even if the termination was conducted in the most compassionate and wonderful and lawful way, the court said there may be one more hurdle. It will be appropriate, in some circumstances, to consider whether the employer took reasonable steps to draw the adverse clauses to the employee's attention before the employee signed. Quite honestly, I was shocked, appalled, heartbroken, I've whined about it ever since. Some of the people on this call have heard me whining about it. I will continue to whine about it but we must accept that when our Supreme Court of Canada opens that kind of door, everybody's going to try and walk through it. So this is something that we're going to have to live with. The courts did not say in what circumstances it would be reasonable to look into that. The courts did not say what would be a reasonable step or what kind of things would be reasonable to demonstrate that the employer had taken reasonable steps to draw to the employee's attention. The court didn't give us guidance on that. So now what's going to happen is there'll be a number of cases, and my colleagues will talk about some of them, that will hopefully give some of that guidance. But that's the game changer. It's one new unavoidable hurdle that you have to consider and we'll talk later about what the practical things that you can do to try and address this hurdle.
Last, but not least, I just want to come back to the framework for analysis whenever you're considering anybody's entitlements on termination. You will often come to us and say, here's the paper, here's the incentive plan, here's the stock option agreement, here's the clause, we only owe this person this. Right? Our courts say we don't start with the paper. When you are determining people's entitlements on termination, where you start is with the reasonable notice analysis and a reasonable notice assumption. In other words, you look at this employee and you determine what are the compensation elements in this person's compensation basket. Salary, bonus, equity, RSUs, stock options, benefits, RRSP matches, pension, car allowances, turkey money, gym memberships, all of those things that employers give their employees to help attract and retain a good workforce. Then the court says, what's the reasonable notice for this person? So let's say the court says, okay, reasonable notice for this person would be 12 months. Then the court says, what is the dollar value of every single one of those basket items for that 12 month period. That is the employer's maximum liability. Once the court looks at all that, only then does the court go and say, alright, for each one of these elements in the basket has the employer successfully put any written clauses in place that successfully limit the employee's entitlement to something less than what we would give them for the whole 12 months. There's all kinds of aspects that come into whether they've successfully limited. Some of those are substantive drafting. Some of those are procedural and, again, my colleagues are going to want to give some of those landmines. Then the court says, okay, if the employer has successfully put a clause in place that limits those entitlements, has the employer engaged in any kind of conduct or misconduct that entitles us, the court, to say no, no, no. Even though you wrote a binding clause, and you got it signed up properly, we're not going to let you benefit from your own contract because you were a bad employer. You did a bad thing. Then, even if the answer to that is no, if an employer's an absolute wonderful employer with perfect documentation, perfect sign up, perfect everything all the way along, then last, but not least, hurdle. The court may still say, employer, this is one of those situations where you should have taken reasonable steps to draw the adverse clause to the attention of the employee, and since you didn't, we won't enforce it. We don't expect that to always happen. As a matter of fact, we know it won't always happen, but we are not sure how often it's going to happen or how easily it's going to happen. With that, I will turn you over to my colleagues to walk you through the other good news of the day. Thanks.
Amy: Thanks very much, Mel, for setting the stage and as you will hear more, it has been a hard go for employer side lawyers. You'll see references throughout our presentation to super hero sound effects because we really have felt, over the last year or so, the smack down. It has been a hard go but we're going to try and give you some practical takeaways from these cases. So let's start with the expression one bad apple spoils the bunch. This, in my view, pretty well sums up what you need to know about the Waksdale case. Next slide, please. So, Waksdale versus Swegon North America. Mr. Waksdale, the plaintiff, was a short service employee who was terminated on a without cause basis and provided with the entitlement specified under the without cause termination provision in his employment agreement. In this case, that was 2 weeks. Mr. Waksdale sued for wrongful dismissal and sought common law reasonable notice. He argued that the cause provision in the employment agreement was unenforceable and as a result the unenforceability of that cause provision should also render the without cause provision unenforceable. Now remember, he was terminated without cause. Cause was not a live issue. Now the employer also conceded that the cause provision in the employment agreement was void as it violated the ESA. Now the employer noted that this was irrelevant, in their view, because he wasn't terminated for cause. They also argued that the severability clause could act to sever the unenforceable provision and save the without cause provision. Next slide, please. So the Superior Court agreed with the employer. The unenforceability of the cause provision did not impact the enforceability of the without cause provision. At the lower court the common law reasonable notice argument was sufficiently rebutted. That's not the end of this story. The court of appeal ultimately overturned the lower courts decision. They ruled that all termination provisions must be interpreted as a whole, not on a piecemeal basis. Think about your bunch of apples. It only took one to spoil the whole. It does not matter if an employer does not rely upon the void cause provision. It truly matters that there was an illegal provision, within the employment agreement, it had the potential to benefit the employer. With respect to the severability clause, the court said the following: severability clauses cannot have any effect on clauses of a contract that have been made void by statute. We learn that termination provisions must be read together. The Court of Appeal found that the severability clause cannot apply to sever the offending portion of the termination provision. So while the employer in this matter did seek leave to the Supreme Court, earlier this year that application was dismissed. So unfortunately we are stuck with the lesson that one bad apple can spoil the bunch. So next slide, please.
Let's talk about some warnings for our employer clients. To say the least, this decision made an already busy year with COVID-19 even busier. Numerous without cause provisions that we were seeing were suddenly at risk of being deemed unenforceable, due to contracts we're reviewing and seeing cause provisions could be found unenforceable, rendering the entire provision unenforceable. The takeaway there is if you haven't had your termination provisions reviewed, or your entire employment agreement for that matter, its really wise to do so. Anything within the last year, due to the series of cases that we're discussing today, has been a massive game change in employment law and if you haven't had a review within the last year or so it's highly recommended that you do so. The language of the cause provision unfortunately was not detailed in the decisions. This makes it really difficult for you, and for us, in assessing the risk within your own employment agreements as to what specifically may be offensive. This case raises the question as to whether other clauses in employment agreements might be serve to invalidate the without cause termination provisions. So think about other statutory offside provisions ultimately impacting the whole. So what's your homework? In our group we used to tell clients, get your templates reviewed every 2 years. Since this string of cases we are now telling our clients, check in with us at least every year, if not more regularly. Next slide, please. Pass it on to my colleague, Cristina.
Cristina: Thank you, Amy. So I will discuss this next set of cases which discuss the failure of termination provisions to reference certain entitlements, comparing provisions that are simply silent and those that are silent while at the same time indicating that the provision encapsulates an employee's entire entitlement upon termination. Next slide, please. So the first case is Sewell and Provincial Fruit Co. Ltd. The plaintiff was employed by the defendant in a senior sales role for approximately 6 months, from October 2018 until April 2019. The plaintiff was terminated without cause and was paid 2 weeks salary and benefits in accordance with the agreement and the ESA. The court found that the termination provisions contained in the employment agreement were null, void and unenforceable. The court accepted that the plaintiff did not understand the full implications of the termination clauses and that they were never explained to him. The court said that it was reasonable for the plaintiff to sign the agreement without parsing out the potential meaning of the termination provisions, or seeking independent legal advice, given the power differential between the parties and the good faith basis upon which they had established their relationship. The court emphasized that prior case law, including Waksdale, make it clear that courts should exercise their discretion in favour of protecting employees and must look at the employment agreement as a whole to determine whether it satisfies the minimum standards. Next slide, please. In this case the court found that the agreement violated the ESA for two reasons. First, the employment agreement signed by the plaintiff contained reference to just cause, stating that the employer could terminate the plaintiff's employment, at any time without notice, or any further compensation for just cause. This provision was illegal as it contracted around the ESA requirement to provide notice except in cases where an employee engaged in willful misconduct. Second, in the event of termination on a without cause basis, the employment agreement provided that the employee would receive payment, or notice, or a combination of notice and pay in lieu of notice and if applicable, severance pay. The court stated that on a plain reading of the agreement, the agreement combined notice and severance pay entitlements in violation of ESA requirement to pay both notice and severance. The court compared this provision to one found to be invalid in the case of Wood and Fred Deeley Imports Ltd. which allowed the employer to terminate the employee's employment without cause by providing 2 weeks notice or pay in lieu. That provision stated that the 2 weeks included all of the employee's entitlements to notice, pay in lieu and severance pay. In that case the court held that the provision operated to create three distinct scenarios. First, the employee could have received a lump sum payment of 18 weeks. In that scenario the employee would receive more than her ESA minimums. Second, Wood could have been given 18 weeks working notice, in which case she would receive more notice than she was entitled to, but no severance pay. Third, Wood could have been given a combination of working notice and a lump sum payment. Depending on the distribution of the two Wood may, or may not have, received what she was entitled to under the ESA. So in Sewell the court held that the wording of the termination provision which, again, stated that the employee would receive payment, notice or a combination of notice and pay in lieu of notice, and if applicable, severance pay. What's similar to that of Wood, even though the total amount of notice and severance was left open, the termination provisions were therefore unenforceable. The plaintiff, a 45 year old employee with less than one year of service was ultimately awarded damages equivalent to 4 months notice. Next slide, please.
This case demonstrates that employees are not required to interpret termination provisions or seek independent legal advice prior to signing employment agreements. This case also reminds drafters and employers that employees are entitled severance pay and notice cannot be provided in lieu. Agreements should therefore be drafted clearly to distinguish between notice and severance pay. So agreements should be reviewed to make sure that this distinction is clear. Again, this case further reinforces the courts demand for virtually perfect drafting of employment agreements so that employer's can rely on the termination provisions therein. Amy, over to you.
Amy: Thanks, Cristina. Okay, onto the Ojo versus Crystal Clear Cosmetics case. In this case we had a plaintiff who had been hired as a warehouse manager in August of 2018 and the plaintiff was terminated in July of 2019. So we're dealing with fairly short service and relying on the termination clause in the employment agreement, the employer paid the plaintiff statutory minimums, as required by the ESA. The termination clause, which I'm just going to read for you, stated the following: Crystal Clear maintains the right to terminate your employment at any time, and without notice or pay in lieu, if you engage in conduct which constitutes just cause for summary dismissal. That's important. Just cause for summary dismissal. In the absence of just cause, Crystal Clear may terminate your employment at any other time, and for any reason, upon providing you with either advance notice and/or applicable payments equivalent to the minimum applicable entitlements contained within the ESA, as amended. For greater certainty Crystal Clear's maximum liability to you for common law notice, termination pay, severance pay or payment in lieu of notice shall be limited to the payment of the amounts specified in the ESA. So, let's talk about the plaintiff's arguments in this case.
First, the plaintiff argued that the just cause for summary dismissal paragraph, contravened the ESA, as dismissal for cause is insufficient to absolve the defendant of it's obligations to provide the plaintiff with reasonable notice. The plaintiff also argued that the termination clause did not allow for the continuation of the plaintiff's benefits during the notice period, as required by the ESA. Next slide, please. The court agreed with the plaintiff and found that the termination provision did not comply with the ESA and was therefore unenforceable. The court applied Waksdale, which we just discussed, recall one bad apple, and relied on the proposition that courts will not enforce a termination provision that is in whole or in part illegal. The court also applied the Sewell case, which we just saw, which had a similar just cause termination clause. Recall that in finding just cause for summary dismissal in Sewell, violated the ESA and was sufficient to render the entire termination provision unenforceable. The court pointed out that it is entirely possible for an employer to establish just cause for termination without satisfying the ESAs clear threshold of willful misconduct or disobedience. So the court also stated the following: The defendant, this is a quote, the defendant is the drafter of the agreement and thus had the opportunity to ensure that provisions of its termination clause properly delineated the threshold of willful misconduct or disobedience, per the ESA, to justify non-payment of notice. The termination clause expressly failed to do so. The court refused to accept one of several potential implied interpretations of the termination clause. It was not willing to read in for the employer's benefit. The defendant employer argued that the ESA does not require an employer to continue benefits, as benefit coverage would be subcontracted to third party insurers, and therefore such a payment obligation would be out of the employer's control. The court ultimately agreed with the plaintiff that the termination provision, as it was drafted, did not specify that benefits would continue during the minimum notice as is required by the ESA. So for those reasons the termination provision in this case was found unenforceable. Next slide, please.
The plaintiff claimed entitlement to a $10,000.00 annual bonus based on a performance target and claimed that he had surpassed that target. The plaintiff's manager denied such a conversation occurred and denied the plaintiff's entitlement to any bonus payment. The court found that there was no evidence to support the plaintiff's version of defense and the plaintiff had failed to discharge his burden of proof. So the warnings we takeaway from this piece, next slide, please. This case is a good example of how courts have applied Waksdale and Sewell. The rule in Waksdale, one bad apple spoils the bunch. Make sure all aspects of your termination provision and your employment agreement comply with the minimum requirements of the ESA. Courts will not enforce termination provisions where part of it is illegal, or offside, the ESA. Also remember in Sewell, your just cause provision will be illegal if it contracts out of the ESA requirement to provide notice, except in cases where the employee engages in willful misconduct, disobedience or willful neglect, neglectful duty that is not trivial and has not been condoned by the employer. So, again, the ESA requires the standard of willful misconduct, disobedience or willful neglectful duty that is not trivial and has not been condoned by the employer. If you aren't dealing with that threshold you cannot say that absolutely no notice, or ESA entitlements, will be provided. The court will not read in words for the employer's benefits. We see that in this case and others and silence on the benefit continuation aspect in this provision also helped render it unenforceable. Over to Cristina to talk about the Lamontagne case.
Cristina: Thanks, Amy. So in this case the employee was a bilingual chartered accountant who had been employed by the employer for approximately 6 years as a controller. The employee claimed common law notice. The court, again, confirms that the court will not enforce termination provisions which are in whole, or in part, illegal. Whether the termination provisions are found in place in the agreement, or separated, or whether the provisions are by their terms otherwise linked. In this case the termination for cause provision was held to be invalid because it breached the ESA. So in line with jurisprudence this invalidated the entirety of the termination clause even if the employer did not try to rely on the termination for cause provision. Next slide, please. The termination for cause provision, in this case, provided that the employees employment could be terminated for cause at anytime without notice. It didn't reference just cause. It just said for cause. The probation clause provided that the employee would be entitled to notice or pay in lieu and, if applicable, severance pay in accordance with the ESA in the event that employment was terminated for any other reason. The employer argued that this provision was different than that in Sewell. The clause meant only that no notice need be given and did not remove the ability to provide payment instead of notice. The employer argued that a provision that did not expressly relieve the employer of having to provide one of either notice or pay did not contravene the ESA. Alternatively, the employer argued that for cause should not be read to include cause at common law as this would create an internal inconsistency in the agreement. The probation clause was applicable for any other reason, not for cause, but allowed ESA notice of termination or pay in lieu of notice. The employer therefore argued that interpreting the for cause provision to include common law cause would require reading in words and lead to an interpretation which would be inconsistent with the intent of the parties. Next slide, please. The court held that the employer's arguments were contradictory and did not give effect to the intention of the parties. The court stated that the appropriate interpretation of for cause is that it applies to both common law and statutory cause. Since the termination for cause provision incorporated the common law just cause concept, it was the legal attempt to contract out of the minimum ESA standards. On the other hand, for any other reason, intended to deal with terminations that occurred for reasons other than for cause. Meaning that it was intended to deal with termination without cause. The court stated that it falls outside of the ordinary meaning of words to suggest that the phrase 'for any other reason' would refer to employment terminated for common law cause or without cause, as a person could not be terminated for any other reason than for cause, but also be terminated for common law cause. Next slide, please.
The termination without cause provision was also held to be invalid as it failed to mention benefits and bonuses. The last sentence of that clause stated that it is understood that the minimum period of notice, or pay in lieu thereof, specified in the ESA will be provided and will constitute your complete entitlement to notice or pay in lieu thereof. The court distinguished this provision from those in previous cases that were silent about the obligation to contribute to benefit plans. Those clauses did not attempt to contract out of the ESA. For example, in the previous case of Roden and Toronto Humane Society, the relevant provision did not contain the all inclusive language. Though the provision was silent on benefits it did not say that the employee would get nothing further beyond notice or payment in lieu thereof. The phrase 'complete entitlement' was interpreted as an attempt to contract out of the payment of benefits and bonuses during the notice period. The argument that complete entitlement only referred to notice, or pay in lieu, and that it was silent on benefits was contradicted by the specific inclusion of severance pay earlier in a provision. Next slide, please. This case is another reminder that the just cause standard is lower than the standard in the ESA which requires willful misconduct. Incorporation of the common law cause standard is an attempt to contract out of minimum standards of the ESA. So this case renders void, not only those provisions which refer to just cause, but also those that referred to cause in general. So, again, employment agreements should be reviewed for reference to cause and updated as necessary. This case also notes that if notice is contracted out of the court will find that the employer also contracted out of pay in lieu of notice. The court does not need to add words to understand that meaning. So it's important to be careful of reference to complete entitlement and/or a failure to reference an employee's entitlement to benefits and bonuses in the employment agreement. Any language that implies that's all folks, may invalidate termination provisions. What the employer might have actually done at the time of termination is irrelevant. Over to you, Amy.
Amy: Thanks, Cristina. Next slide, please. We're going to talk about Perretta versus Rand. This case involved the plaintiff who had been working as a customer service advocate, starting in September of 2014 and was terminated approximately 6 years later, on a without cause basis. The employment agreement provided that the employer could terminate the employee's employment without cause by providing minimum notice, benefits and severance pay required by the ESA, plus 2 weeks. The employer refused to pay the additional 2 weeks until the employee signed a full and final release agreement. The employee sent a letter to the employer demanding payment of what was contractually required as the 2 weeks pay and the employer refused. Following the letter from the employee's counsel, to the employer demanding payment of the 2 weeks, the employer paid out the amounts pursuant to the contract. The employee argued that the employer had repudiated the employment agreement and she was entitled to damages for wrongful dismissal. The employer responded by saying it had simply made a mistake and apologized and there was no repudiation of the contract. Next slide, please.
The test for repudiation is whether considering the surrounding circumstances, including the nature of the contract, the motives which prompted the purported breach, the impact of the party's conduct on the other party and what a reasonable person would conclude as to whether the breaching party no longer intended to be bound by the contract with the result that the innocent party would be deprived of substantially the whole benefit of the contract. So a party can repudiate a contract without subjectively intending to do so. This assessment is truly made on an objective basis. In this case the employer was contractually obligated to pay the additional 2 weeks that it had said was only going to be paid after signing a full and final release. By refusing to pay those 2 weeks the employer had effectively breached the employment agreement and, based on the test we just talked about, it had been repudiated. Next slide, please. So the demand for the full and final release agreement was stated 4 times by the employer and in the termination letter itself. It was clearly conveyed that the employee would not receive those 2 weeks unless she had first signed the full and final release agreement. The demand for the full and final release was not, in the court's view, casual or an accidental slip up. The employer had taken time, and with purpose, created this full and final release agreement and then followed up with the employee to have her execute it. This was one of several attempts that the employer had made to do something for its own exclusive benefit. The fact that the employer asked again after providing the termination notice that asked for the release agreement to be signed, so followed up after the termination notice was delivered, was also further demonstration, in the court's view, that this was not a mistake. It was in the termination letter. He then followed up when she didn't execute the release. The court was satisfied that a reasonable person would conclude that the employer intended to no longer be bound by the employment agreement, through these attempts to get her to sign a release when her contract didn't require it. By refusing to pay the 2 weeks salary the employer deprived the entire monetary benefit available to her, upon termination, apart from the statutory benefits. So the breach could not be cured, as the court stated, by an apology or by any post-breach payments of amounts owed. Next slide, please.
The court went on to comment on the validity of termination provisions in the employment agreement and concluded that they would be unenforceable. In this case the termination with cause provision listed 11 categories of what would constitute just cause on grounds the employee could be terminated, without notice, pay in lieu or severance subject to the ESA. So there's a whole host of possible categories for just cause. The court considered all of these categories and 3 of the 11 categories was conduct that failed to rise to the statutory threshold required for termination without notice or pay in lieu. The court rejected the employer's argument that the phrase 'subject to the ESA', which was attached to the provision, would serve any purpose of saving the provision. The court made it clear, again as we've heard before, that any ambiguity must be interpreted in a manner that gives the greater benefit to the employee. Next slide, please. So some warnings that we take from this case, we again, it sounds like we're a broken record here but again, we must ensure that termination provisions are compliant with the ESA. Failure to pay the contractual entitlements pursuant to what is stated in the employment agreement could invalidate what would otherwise be a valid termination provision. We have to ensure that agreements contain language requiring a release when an employer actually intends on asking for a release. We learn from this case that you can't, after the fact, demand a release for a contractually one has not been stipulated. The categories of cause really should not be enumerated in the employment agreement because this case demonstrated how easily you can fall offside with not rising to that ESA threshold of cause. The phrase 'subject to the ESA' is not going to help you in the event your provision is invalid. It's not going to act as a savings for you, at all. With that, over to Cristina to talk a little bit about the sophistication of parties during contract.
Cristina: Thanks, Amy. So these next cases discuss whether an invalid termination provision can be saved and enforced when both parties are sophisticated business people. Both of these decisions came out in the last few months with pretty opposite results. So the first case, Rahman and Cannon Design Architecture Inc. came out at the end of the August. The plaintiff had been employed as a principal of the employer for approximately 4 years. At the time of the hiring the employee had been sent a written offer letter and a more general officer's agreement that was more of a general policy document. The offer letter provided that in the event of a conflict the offer letter would govern. The plaintiff alleged that the provisions in the employment agreement violated the ESA for the following reasons. First, the just cause termination provision allegedly permitted termination without notice in circumstances beyond those permitted by the ESA. The notice provisions reported to pay base salary, only, during the notice period. There were insufficient notice provisions in the future and a stripping of bonus entitlement even if fully earned. At the time of hiring the plaintiff had sought independent legal advice regarding the terms of the offer employment letter. The plaintiff had forwarded the letter from her counsel raising issues with the termination language to her employer. The lawyer's letter had contained a summary of termination entitlements under the ESA and a caution that the ESA provisions represented a statutory minimum that could not be contracted out of. However, the lawyer's letter did not raise concerns regarding the just cause termination language. This exchange resulted in material improvements to the proposed terms of employment in relation to the severance to be paid to the employee within the first 5 years of employment. Next slide, please.
The court stated that there could be no suggestion that the employee was not adequately informed of both the nature of the statutory and common law rights that were the subject of the negotiations and the impact of the agreement proposed by the employer on these rights. The court stated that Ojo, a case we've discussed this morning, could not represent a conclusive and binding determination that the phrase 'conduct that constitutes just cause for summary dismissal' must in every contract and in very context be construed as authorizing dismissal in circumstances that would contravene the ESA and it's regulations. So there was no basis to imply into the phrase just cause for summary dismissal, a standard below the ESA standard, and to apply a strict, or even adverse, construction approach to the termination provisions in the context of this case where the termination provisions had been the object of specific negotiation, with the benefit of time and independent legal advice between reasonably sophisticated parties, with neither a compulsion nor a marked disparity of bargaining power. The negotiations had resulted in material improvements for the benefit of the prospective employee, in excess of the ESA minimums, and the offer letter contained an explicit for greater certainty clause recognizing that the employer's maximum liability for common law notice, termination pay, benefit continuation, severance pay or payment in lieu of notice would be limited to the greater of the notice required in the officer's agreement or the minimum amounts specified in the ESA. In short, the court pointed to a mutual intent to comply with the minimum standards of the ESA. The agreement was freely entered into between two reasonably sophisticated parties in the absence of particular disparity in bargaining power. The offer letter could not be considered to be unconscionable nor contrary to public policy in this context. There is also no evidence of the employer's policy or practice authorizing summary dismissal of employees for cause in circumstances beyond those in the ESA of willful misconduct. Next slide, please.
The court also pointed to section 52 of the ESA which states that if the employment contract provides a greater benefit to an employee than an employment standard, the contract will apply. In this case the employment agreement provided for pay in excess of the statutory minimums in the event of termination within the first 5 years. If the provisions were void, they would have to be void for all purposes. In addition to depriving the employees of bargain for severance benefits that exceed the common law standard, the court found that finding otherwise would create an absurd result. The court also provided the following comment on the current state of law which I will read to you. Uncertainty in the application of the law to fairly negotiate employment agreements will have the unintended consequence of causing employers to forego efforts to offer severance benefits, beyond ESA minimum, for fear that any steps beyond the limited bounds of the ESA will carry an unacceptable level of risk of being found invalid, with the resulting potential for common law liability far in excess of what either side expected at the time the contract was agreed to. This is already occurring to some degree. Over time there are no winners in such a world. So despite the termination provisions being, on their face, unenforceable due to the reference to just cause the termination provisions were upheld as valid. Next slide, please.
So this case provides a bit of relief to employers as the court confirmed that sophisticated employees, who engage in the negotiation of termination provisions, will be held to their bargain. The court will also look to the intention of the parties and not just the wording and the provisions for enforceability. However, as we will see with the next case, this little bit of relief was short lived. Next slide, please.
In this case, Livshin and The Clinic Network Canada Inc., this case came out very recently. In this case Livshin's employment agreement was negotiated as a part of the commercial transaction by which two businesses, in which Livshin had an interest, were sold to TCN. Both parties were considered to be sophisticated business people and were represented by counsel in relation to the transaction and the employment agreement. The employment agreement was for a fixed term of 3 years and was entered into in 2018. At the time of the negotiations, Livshin sought a provision where he would be entitled to payment of the remainder of the term, if he was terminated prior to the end of the term. TCN refused to agree to this request. The signed agreement did not contemplate that Livshin would be paid for the balance of the term. Due to the pandemic, Livshin was temporarily laid off from his employment with TCN. The employment agreement did not provide for temporary layoffs and due to the passage of Ontario's Infectious Disease Emergency Leave legislation, Livshin's temporary layoff was converted to a deemed IDEL. He was subsequently terminated in August of 2020. Next slide, please.
The court stated that the fact that the employment agreement was negotiated in the context of a commercial transaction presented a wrinkle relative to recent case law, standing for the principle that termination provisions cannot violate the ESA. The employer submitted that even if the termination provision breached the ESA, the promise of recent case law such as Waksdale, that there is a power imbalance between employers and employees and that employees must be protected, did not arise in this case and so there was no need for the plaintiff to be protected. Next slide, please. The court noted that the employment agreement did not differentiate between the common law and statutory standards of termination. As a result the termination provision was void for depriving the employee of his entitlements. The court stated that the bottom line from case law is that employment agreements should clearly comply with the ESA or be invalidated. The court also noted that the imbalance of power is inherent in the employer/employee relationship. An employee may not appreciate the distinction between the two standards. So the sophistication of the parties was irrelevant. The court held that there was no compelling reason why TCN should be permitted to rely on a termination provision that did not comply with the ESA. There was no evidence to suggest that there were specific commercial imperatives arising from the acquisition, or the industry more generally, that would require TCN to be able to dismiss Livshin for just cause, without notice, and without regard to provisions of the ESA. However, the court did leave the door open for future cases by stating, where there is a commercial imperative linked to and necessitated by commercial transaction, out of which the employment relationship arises and the reason for the provision is primarily related to the commercial transaction, then there may be latitude for a provision that is, on its face, at odds with protective legislation. Next slide, please.
The court emphasized that employers must be encouraged to comply with the ESA as an overriding goal. This goal trumped the suggestion that Livshin may have been better able to recognize, quote, the potential peril. Where compliance is achieved subjective assessments of sophistication would be unnecessary. The termination provisions were void. The court awarded damages from the date of the temporary layoff to the end of the fixed term agreement, which was a period of roughly 20 months. By doing so the court expressly ignored the intentions of the parties and the negotiations that they had engaged in when they had negotiated the employment agreement. Due to the fixed term nature of the agreement, the plaintiff did not have a duty to mitigate his damages. Next slide, please. The relief granted to employers by Rahman was truly short lived. Despite that case the sophistication of parties may indeed be irrelevant and termination provisions may be invalidated where an employee receives independent legal advice. The court also expressly went against the mutual intention of the parties evidenced during negotiations with respect to payment to the end of the term of employment. Over to you, Amy.
Amy: Thanks, partner. Okay, so kind of going back to where we started, truly, in this presentation with the stage that Matthews set. We'll end off our case studies with the Battiston versus Microsoft case but you'll see some themes from Matthews revisited here. So this case involved a plaintiff who was employed at Microsoft for about 23 years, until he was terminated without cause, in August 2018. And the plaintiff was employed as the business and operations manager. The prior issues in this case included the following: number one, whether the plaintiff was entitled to cash bonus during the fiscal year leading up to his termination, as well as during his notice period. The second primary issue was whether the plaintiff was entitled to the vesting of his stock bonuses during the notice period. So let's start by looking at the issue of entitlement to the cash bonus. We'll first start by, there's two parts to that, we'll look at what the court had to say about the request for cash bonus during the notice period. The court found that the plaintiff had received a merit increase and cash bonus every year from Microsoft except the last year of his employment. The court found that there was nothing in Microsoft's rewards policy which would remove the plaintiff's common law entitlement to receive bonuses during the notice period. The court awarded damages for a merit increase and cash bonus during the notice period based on the average amounts that had been awarded to the plaintiff in the 2 year period preceding the termination. In so doing the court recognized that the plaintiff had lost the opportunity to earn a merit increase and cash bonus during that notice period. The court rejected the employer's argument that the measure of the plaintiff's damages should be zero during the notice period. The employer had asserted in this case that the plaintiff would not have improved his performance given that he had been notified of the employer's dissatisfaction with performance, repeatedly, leading up to termination. The court did not buy that argument.
So we'll now discuss what the court found with respect to the request for cash bonus in the fiscal leading up to termination. So reviewing the policy the court noted that the decision to aware a bonus is, in this policy, based on meetings between the employer and managers, formal and informal feedback provided to the employee and the employee's manager's own observations. So the court ultimately dismissed the plaintiff's claim for merit increase and cash bonus for the fiscal year leading up to termination and that was based on the evidence that the employer was able to demonstrate with respect to the plaintiff's performance. So in this regard the court held that the zero bonus recommendation that the employer had provided was not unreasonable given the evidence of the plaintiff's poor performance. So we see here that leading up to termination, evidence that the employer would not have recommended a bonus based on performance, but looking at the policy wording which didn't oust the entitlement during common law notice, we see that the court awarded cash bonus during that notice period. Next slide, please.
Now onto the request for the unvested shares. Under the terms of the applicable stock award agreement, each stock award vested in various percentage increments over years or months, and at the time of the termination of this plaintiff's employment he had just over a thousand awarded but unvested shares. The plaintiff testified that he had not read the stock award agreement nor had Microsoft drawn his attention to the termination provisions within the stock award agreement. The court found that the stock award agreement unambiguously excluded the right to vest his stock awards after he had been terminated without cause. So the court found, however, that the termination provisions were harsh and oppressive within that agreement and accepted the plaintiff's evidence that he was unaware of the termination provisions in that award agreement, as they had not been brought to his attention. Recall where we started in this presentation. The court found that the email communication, as between the employee and employer that accompanied the notice of the stock award each year, did not amount to reasonable measures, in their view, of drawing the termination provisions to the employee's attention. As a result the court found that the employer could not enforce those termination provisions against the plaintiff. As such the plaintiff was entitled to damages in lieu of the just over the thousand shares awarded for those that remained unvested. Next slide, please.
The story doesn't end there. The employer appealed the decision to the Ontario Court of Appeal and we just recently received that decision. The employer specifically appealed the trial judge's decision with respect to the entitlement to unvested stock awards after termination. The Court of Appeal held that the trial judge's conclusions, that he did not receive notice and that the employment agreement was unenforceable, could not stand for the following reasons. So number one, there was evidence that the employee had expressly agreed to the terms of the stock agreement for 16 years, plus the employee had made a conscious decision not to read the agreement, despite indicating in the communications that were as between employee/employer that he had read the agreement, and he indicated that by clicking a box confirming that he'd reviewed this information. The court said that by misrepresenting to the employer, the employee put himself in a better position than an employee who did not mispresent, thereby taking advantage of his own wrong.
So the implications stemming from this case. This case demonstrates that employers should strive to ensure that termination provisions purporting to limit an employee's entitlements are brought to an employee's attention. Despite the Court of Appeal decision we still think that the provisions, the attention grabbing provisions, are important. Failure to notify the employee can effectively nullify an otherwise enforceable provision. This case is also a good reminder to keep records. Keep records of presentations, policies, plans, all signed agreements, that explain how these plans work and rights that may be forfeited or limited at termination. This information is crucial to help demonstrate that this information was available, and was brought to the employee's attention, particularly those rights at termination. This case also tells us to be careful with click through agreements. If you have been working with us over the last year or so you will have seen our efforts to insert attention grabbers throughout our agreements. To help highlight certain forfeiture provisions or provisions limiting rights at termination. So the hey you, while you might not put the graphic that's on this slide in your employment agreement, that's the objective we're truly trying to achieve in our drafting work. The consensus in our view is it's important to continue the efforts of drawing an employee's attention to those provisions that the employee could later argue they didn't know about or didn't understand the importance of. So we're trying to nullify that argument by saying, Hey you, read this, but perhaps not in this graphic way. You'll see in our agreements that we have signature placeholders throughout, and we bold and underline certain provisions to really try and draw the attention of the employee to reviewing them, in advance of executing the employment agreement. So with that, I believe we can now open it up to our questions and I'll hand it over to Mel, who I think has been helping us monitor some questions coming in.
Melanie: Hello. So, as some of you can imagine, the Court of Appeal case in Battiston at least gave some small comfort to my little beating heart about the fact that the trial judge had been overly kind to this employee. But don't get too excited, you folks, because as my colleagues have pointed out it's a crap shoot. That's actually what we need you to understand, at this point, is if you put the same clause and the same facts in front of four different Ontario judges, or for that matter across Canada judges at this point, at trial level today, it is not going to be clear unless the clause is clearly crappy. Or the employer's clearly done something wrong. But if it's a generally decently, reasonably well drafted clause, properly signed up and the employee is of a reasonable sophistication level, we can't tell you what's going to happen. So one of the things that we're going to do, and I'm going to turn it back over to Amy and Cristina for this, is we're going to emphasize to you again how important it is that you do the homework that we've given you. That you pull out your incentive plans. You pull out your award agreements. You pull out your cover communications. For those of you who have equity plans, and your public companies, and you're using platforms like Carta or, the other names escape me, to organize, deliver and get your award agreements signed up, there are things you're going to have to do that you may have to outside of that platform, because so far our experience is that most of those external platforms do not enable you to be very nimble in response to our judicial activism here. In terms of doing the kinds of bootstrapping, sign offs and calling to attention to that we need. That's one of the reasons why both Amy and Cristina have emphasized that you've got to be careful about simply clicking through or standardized, I've read it, I accept it, I agree. You've got to be really careful. You need more than just that. In terms of the Q&A, most of the Q&A I have been answering on the fly so far, but there were a few questions that came up about probation terminations. So I would like to address those. First of all, the issues about enforceability of probationary terminations are no different than everything that we've been talking about here. You're still going to need an enforceable termination clause. You're still going to need to go through all of those, jump through all of those hurdles, to ensure that you actually have successfully limited an employees entitlements during a probationary termination to the minimums, if any, under Employment Standards, if that's what you're trying to do. Having said that, I have always believed that it is smarter to focus on having a robust strong termination clause that says, if we terminate you in the first 3 months you get this little bit and no more. If we terminate you in the first 6 months you get this little bit and no more, depending on what your probationary period you are thinking in your mind, and then say if we terminate you after that you get this, this, this and this, with a maximum of that. I personally believe that having probationary clauses puts more of an obligation and a burden and creates more problems for employers than they every solve. Everybody on this call who's been familiar with the situation where the probationary period was 3 days from expiring their probationary period and the manager comes to HR and says, I forgot to tell you. I don't want to keep them. Can we get rid of them? Or, the day after their probationary period expires and the manager comes and says, Oh, I forgot to tell you. Situations where the person's away for 4 weeks during their probationary. Let's suppose they were out for COVID during that time. Now what do you do? Because you haven't really had a chance to evaluate them. Having a probationary period, saying that you have a probationary period, actually imposes a higher level of obligation on the employer to draw the employees attention to defaults or problems and give them an opportunity to correct. You can't always do that. You can't correct stupid. You can't correct mean. So you want to have the maximum freedom to get people out of your workplace, if you look at them and assess them and think, you know what? We made a mistake. This is not the right person. They are not the droid you're looking for. In that situation, if you have a probationary clause and you don't follow the sort of process up, well we have this issue therefore we need you to do this, you may actually find yourself in more trouble because you had a probationary clause than you would if you didn't. So sorry. That's my lecture on probationary clauses.
One of the, and this is a question that is relevant to everybody, one of the questions I'm seeing is how long after a termination can an employee come back if there's a flaw in the stock option agreement in light of these recent cases? Well, this is not confined to problems in the stock option agreement. Essentially when you terminate an employee, there will be a limitation period that will apply a deadline for them to come back and launch a law suit against you, if they believe that you have not given them all their entitlements. The limitation periods vary from Province to Province. Generally speaking, typically it's a 2 year limitation period for the kinds of contractual obligations that are in an employment relationship. Ontario, it is 2 years. There are nuances to that because sometimes it depends on exactly when the employer's breached. Sometimes the breach is not at the actual time of termination. It's at the point that the employer says, well I won't give this to you unless. So, again, speak to your employment lawyers if you have a specific situation and you're worried about the deadlines. But as a general rule, you can assume that unless and until you have a signed release agreement in your hands, there's going to be a 2 year risk period, post-termination, for most things.
One of the other questions that I'm seeing has to do essentially with the homework and when it is that you call the employee's attention to the clause? Calling somebody's attention to the clause after they've already accepted, and during their onboarding, is too late. You need to call out attention to the clause at the point of offer. So one of the things that we've been doing is right before their little signature, we've been adding a little warning box, or one of the things we've been suggesting or one of the things we're seeing, is a little warning box that says, before you sign we call your attention, again, to clause blah, blah, blah, blah, blah. There are various mechanisms you can adopt. Again, we encourage you to talk to your employment lawyers, but calling attention out has to be before they sign the document. After is too late.
Amy: I just want to add there, real quick, I think that also plays into providing reasonable timelines to review the agreement and seek independent legal advice before having to return the signed agreement. Right? So if you're not providing a meaningful opportunity for your employee to review and seek advice, the courts are also going to be quite critical, even if you have these fancy attention grabbing provisions. If you haven't given an opportunity for them to take it away, review it and seek advice.
Melanie: Cristina, can you speak a little bit to the issue of what employers might do if they want to try and fix problems that they have right now.
Cristina: Absolutely. So in order to try and fix these problems you can't just present to the employee with a new agreement with the new provisions. They would need to receive something in exchange for the employment agreement which would limit their rights. Which is known as consideration. So this could be a $500.00 one time payment. It could be a parking space. Again, the consideration would depend on the circumstances, what the employee is already entitled to, but in order for the new termination provisions to be enforceable you need to give the employee something in exchange for signing the new agreement. So you can review your agreements an update them to make sure that they're consistent with the current state of the law, but in order for those agreements to be enforceable, the employees have to be given something in exchange.
Melanie: Okay, sorry, now they're just like flooding in.
Amy: We do have one. Timelines for seeking ILA.
Melanie: Yup.
Amy: We say 5 business days. I mean that's just, if you think about logistically how long it might take for someone to take it away, review it themselves, and then ask a lawyer some questions, 5 days isn't a whole lot of time but it should be, I would say, your benchmark.
Melanie: Also, you want to give longer time to people who are already your employees, where you're asking to change something for your own benefit. For new hires, the rock bottom minimum should be 3 clear business days. This is less important in Quebec than it is in the rest of the world, I'm not speaking to Quebec, or the rest of Canada, but Amy's right. The longer the better in terms of being able to at least avoid any argument that you rushed me into it.
Somebody's asking about the pitfalls of providing retroactive promotion letters that have new termination provisions in them. Cristina, over to you on that.
Cristina: That would likely be probably unenforceable. Any changes to their rights need to be completed before you give them something in exchange. So if you're going to promote somebody, you have to give them the employment agreement with the updated termination provisions, before the promotion will come into effect. Otherwise it will probably be considered unenforceable.
Melanie: And, I think we've hit all of the live ones that came in after. One of the other questions, and I think this is again of general interest to people is, somebody asked whether the things that we're talking about would apply in the context of service agreements, or consulting agreements. All of you know that in some situations you're in a consulting agreement or services agreement with an established consulting firm with many people in it and it's much more of a commercial business relationship. But a lot of the time you're in services agreements or consulting agreements with people who, when a push comes to shove a court might actually look at it as those it were an employment relationship or a quasi employment relationship. Therefore whenever you're entering into those kinds of agreements with individuals, or one person shops, or tiny little organizations, it is a very good idea to follow these same practices and assume that the same issues are going to apply.
I'm going to shut up now. Turn it back over to Elisa so we can wrap up.
Elisa: Thank you, Mel, Amy and Cristina. That was a very informative webinar. I hope everyone found it as informative as I did. Our final grand finale webinar will be on November 25. During this webinar we'll have a panel of partners reviewing the top cases of 2021 and answering your questions. So I hope that you can join us at that final webinar and I hope everyone has a wonderful day.
Employers rely on forfeiture clauses in equity and incentive plans, as well as on contractual termination clauses, to limit their termination-related liabilities. But our courts are increasingly willing – even eager – to find new reasons to invalidate those clauses. The cumulative effect of recent court decisions has been game-changing, in terms of exposure to liability.
Our experienced panel discuss how these cases impact the drafting and enforceability of these clauses. Our panel will guide you through the practical steps that employers should take to reduce the risk of invalidation — from updating templates to overhauling your communication, delivery and sign-off strategies.
This on-demand webinar is part of our 2021 Employment, Labour & Equalities Law Webinar Series. Watch more from the series »
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