Legal Blog

Employment Agreement Termination Clauses

Baker v. Van Dolder and Li v. Wayfair, 2026 ONCA 568

The Ontario Court of Appeal addressed conflicting lower court rulings regarding virtually identical employment termination clauses, clarifying that courts must apply modern principles of contractual interpretation rather than a technical, isolated reading of phrases like “at any time” or “for any reason”. In Baker, the lower court had voided a contract for containing termination without cause “at any time” language and a with-cause standard, while in Li, the lower court had upheld a contract allowing termination “at any time and for any reason”. The Court of Appeal allowed the appeal in Baker and dismissed the appeal in Li, concluding that when read in the context of the entire agreement and the parties’ objective intentions, both contracts demonstrated a clear commitment to comply with the minimum standards of the Employment Standards Act. Consequently, the court ruled that the termination provisions were valid and enforceable.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.