The Ontario Court of Appeal confirmed in Mikelsteins v.
Morrison Hershfield Limited1 that the terms of a
shareholders' agreement govern an employee's rights with
respect to his or her shares on termination.
What you need to know
- Contractual rights under a
shareholders' agreement cannot be conflated with an
employee's entitlement to damages for wrongful dismissal.
- Employers can take comfort that
employee rights with respect to shares purchased under a
shareholders' agreement will be governed by the agreement,
including on termination.
Background
The plaintiff, Ivars Mikelsteins, was terminated by Morrison
Hershfield Limited (MHL) without cause (and without notice) after
31 years of employment.
