January 30, 2022

By Brian Babcock

Courts often favour employees in disputes over the terms of employment contracts, as we have written many times before. This is typically justified on the basis of the inequality of bargaining power between employers and employees.

One way that courts do this is by requiring employers to bring onerous or unusual clauses buried in lengthy employment contracts specifically to the attention of the employee before the contract is signed. This is consistent with how courts protect consumers from one sided provisions in standard form agreements pushed on them, often to buy essential goods or services.

This approach however does not apply to all terms in all employment contracts.

The Ontario Court of Appeal confronted the situation in Battiston v. Microsoft Canada Inc. The employee was employed by Microsoft for almost 23 years before being terminated without cause. At issue was his entitlement to stock awards after termination. For 16 years, the employee had received an email that required him to click a box to acknowledge having read the terms of the stock award plan, which provided that no stock vested after termination. Though the employee clicked the box, he never read the agreement.

At trial, the judge found that no notice had been given, and awarded the value of the stock award as part of the payments to the employee. Microsoft appealed.

The Court of Appeal found in Microsoft’s favour, stating that the judge was wrong in finding that there was no notice of the provision because:

  • for 16 years, the employee expressly agreed to the terms of the agreement
  • the employee made a conscious decision not to read the agreement despite clicking the box saying he had
  • he ought not be able to take advantage of his own wrong.

It is important to note that the employee here was a manager, who might be presumed to be more sophisticated than a rank and file worker. It would be interesting to see how this approach is applied in the case of a pharmacy technician in Thunder Bay, or a retail clerk in Kenora.

We expect that employers will continue to draft agreements that favour themselves, and employees, anxious for work, to often sign without reading. We further expect that courts will often find in favour of employees if the terms are unfair to them. This case simply reassures us that on the correct facts, properly presented, courts will still find in favour of employers in certain situations.

If you are an employer, having an experienced employment lawyer draft or review your standard employment agreement will increase the likelihood that it will stand up in court. If you are sued for wrongful dismissal, you want to be represented by a lawyer skilled in presenting your facts favourably to the judge, such as those at Weilers Law.

If you are an employee, you cannot assume that court will just ignore contractual provisions you dislike. You ought to read your terms of employment carefully before you sign, get them explained if you do not understand, and try to negotiate to avoid one sided terms. If you need to sue for wrongful dismissal, you too need a skilled lawyer on your side. Weilers Law acts for employees as well as employers in this area.