Executive Summary: Key Legal and Evidentiary Issues

• Termination clause in Employment Agreement was void for breaching the Employment Standards Act, 2000 (ESA), invalidating all termination provisions.

• Offer Letter’s “minimum of 4 months’ base salary” clause lacked the clarity required to rebut common law notice entitlements.

• Court found AlayaCare induced the plaintiff to leave long-term, secure employment, justifying an extended notice period.

• Despite short tenure at AlayaCare, the plaintiff’s senior role, industry experience, and age (62) supported a 14-month notice period.

• Plaintiff was entitled to compensation for salary, benefits, bonuses, and vested RSUs during the notice period.

• Summary judgment was granted for wrongful dismissal; total damages awarded amounted to $204,404.18 plus pre-judgment interest.

Background

Moyra Miller, a 61-year-old executive, was employed by WellSky for nearly 12 years before joining AlayaCare Inc. in January 2022. At WellSky, she held a senior role with significant responsibilities and was considered a key asset. In the fall of 2021, AlayaCare initiated contact with Miller via LinkedIn and actively pursued her through multiple conversations and meetings, including with its CEO and co-founder. During these discussions, Miller disclosed her compensation and equity entitlements at WellSky and expressed concern over possible legal repercussions of leaving. AlayaCare assured her it would indemnify her in case of litigation.

On December 15, 2021, Miller resigned from WellSky and accepted a formal Offer of Employment from AlayaCare, which promised an annual salary of $200,000, a $40,000 performance bonus, and 2,520 RSUs (Restricted Share Units) valued at $240,000 to vest over three years. The Offer Letter stated she would receive “a minimum of 4 months of base salary” if terminated without cause. An Employment Agreement was signed the same day, incorporating the Offer Letter and reiterating similar termination terms.

Miller began her employment on January 17, 2022, but alleged that her role deviated from what had been promised. On August 15, 2022, she was terminated without cause as part of a company-wide restructuring. She received four months' base salary as severance but no bonus or access to vested RSUs.

Legal Dispute

Miller filed a motion for summary judgment, claiming wrongful dismissal. She argued that:

• The Employment Agreement violated the ESA because its termination clause allowed dismissal for “cause” without pay, without adhering to the stricter ESA definition of “wilful misconduct.”

• The Offer Letter did not override common law entitlements due to its ambiguous language.

• She was induced to leave secure employment and thus should be awarded extended notice.

• She was entitled to full compensation during a common law notice period, including salary, benefits, bonus, and RSUs.

AlayaCare countered that:

• Miller was a short-term employee.

• The Offer Letter provided adequate notice consistent with the ESA.

• She was not induced to leave WellSky and received RSUs that had vested.

Analysis and Findings

The Ontario Superior Court ruled that the Employment Agreement's “for cause” termination clause violated the ESA because it did not meet the threshold of “wilful misconduct” under the Act. Following Waksdale v. Swegon North America Inc. and Rahman v. Cannon Design, the court found that the invalid “for cause” clause rendered all termination clauses void.

The Offer Letter, although referenced by the defendant as the governing document, did not contain clear or exclusive language displacing common law entitlements. Its provision of a “minimum” of four months’ base salary was ambiguous and not a clear rebuttal of common law notice. Additionally, the clause failed to mention benefits or bonuses, which are employment standards protected by the ESA.

The court also accepted that AlayaCare induced Miller to leave WellSky. It cited LinkedIn messages and conversations indicating deliberate efforts by AlayaCare to “lure” her, including inquiring about her compensation and offering to indemnify her against legal action. This inducement, coupled with her age (62), her executive-level role, and her long experience in a niche industry, supported a longer notice period despite her brief tenure at AlayaCare.

The non-solicitation clause in the Employment Agreement did not affect the court’s assessment because there was no evidence it impacted Miller’s job search or that AlayaCare tried to enforce it.

Determination of Reasonable Notice and Damages

Justice Carroccia determined that Miller was entitled to 14 months of reasonable notice. She calculated the damages as follows:

• Lost salary: $79,166.70 (after accounting for severance already paid and post-dismissal income from new employment)

• Lost benefits: $1,330.28 (at $95.02/month over 14 months)

• Lost bonuses: $33,750 (based on a 56.25% bonus entitlement over 2022 and pro-rated 2023, less a $7,500 bonus received from her new employer)

• Value of vested RSUs: $90,157.20 (840 RSUs at $107.33/share, due to vest in January 2023)

Total Damages Awarded: $204,404.18

Pre-judgment interest was also awarded under section 128(1) of the Courts of Justice Act. The court invited the parties to make written submissions regarding costs if they could not agree on them.

Conclusion

This decision underscores the importance of drafting ESA-compliant employment contracts and using clear, unambiguous language to limit common law notice entitlements. It also reaffirms that inducement is a powerful factor in wrongful dismissal claims and that courts will closely examine employer conduct during recruitment. Despite her brief employment, Miller’s senior role, age, and the circumstances of her recruitment justified a significant notice period and substantial compensation.