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Baker v. Van Dolder’s Home Team Inc.: Court Strikes Down Termination Clauses
Ontario termination clause law is at a turning point, and Baker v. Van Dolder's Home Team Inc. sits at the center of it. On February 11, 2025, the Superior Court of Justice in Owen Sound struck down both the without-cause and with-cause provisions of an employment contract over wording many employers would consider entirely standard, entitling the employee to common law reasonable notice instead of the minimums under the Employment Standards Act, 2000 (ESA). The decision is now before the Court of Appeal, heard alongside Li v. Wayfair, and it has become one of the most closely watched employment appeals in the province. For employers, the suspense is not academic: the enforceability of clauses in agreements you are relying on right now may turn on how this appeal is decided.
The Court also confirmed that a general promise to comply with the ESA does not rescue a clause whose specific wording offends the statute. The decision is under appeal: the Court of Appeal heard Baker together with Li v. Wayfair Canada Inc. on March 25, 2026, and the decision is reserved. Until it is overturned, the Superior Court's ruling stands and binds.
Do your employment agreements use "at any time" language or a broad "just cause" definition?
Those are the exact provisions the Court of Appeal is weighing in Baker and Li. A clause that looks fine today could read very differently once the decision lands. Get your agreements reviewed now so you are protected whichever way the appeal goes.
Call: 1-800-771-7882 Review My Employment AgreementsBackground: a standard-looking contract that did not hold
Frederick Baker was employed by Van Dolder's Home Team Inc. under a written employment contract that included a without-cause clause allowing termination "at any time" with only ESA minimums, and a with-cause clause permitting dismissal without notice for reasons such as poor performance, dishonesty, or absenteeism.
Mr. Baker was terminated without cause in May 2023 and brought a wrongful dismissal claim, in which he is represented by Achkar Law. The employer brought a motion for summary judgment, arguing that the contract validly limited his entitlements to the ESA minimums. Justice Sproat rejected that position and held the termination provisions unenforceable.
What the Court decided
The "without cause" clause was invalid
The clause permitted termination "at any time," language the Court found could allow dismissal in circumstances the ESA prohibits, such as during a protected leave or as a reprisal. Following Dufault, the Court held this implied an absolute right to dismiss that runs afoul of the ESA, and that general ESA-compliance language could not save it.
The "with cause" clause was invalid
The with-cause clause allowed dismissal without notice for conduct that fell below the ESA's higher threshold of wilful misconduct, disobedience, or wilful neglect of duty. By permitting dismissal for ordinary performance or attendance issues without ESA entitlements, the clause offended the statute.
One invalid part sinks the whole scheme
Relying on Waksdale v. Swegon North America Inc. (2020 ONCA 391), the Court confirmed that where any part of a termination provision is invalid, the entire termination scheme fails. The defective provisions could not be severed to preserve the rest.
Common law notice applies
With the termination clause unenforceable, Mr. Baker is entitled to common law reasonable notice, which is typically far greater than the ESA minimum. The employer's summary judgment motion was dismissed and the matter will proceed to a hearing on damages.
The decision the whole province is waiting for
Baker did not land in a vacuum. Ontario has produced a run of conflicting termination clause decisions: Dufault and Baker struck clauses for using "at any time," while Li v. Wayfair and Jones v. Strides Toronto declined to follow that reasoning. Those positions cannot all be right, and employers and their counsel have been waiting for the Court of Appeal to settle the question once and for all.
That moment has nearly arrived. The Court of Appeal heard Baker and Li together on March 25, 2026, and reserved its decision. The ruling is expected to determine whether "at any time" language, on its own, is fatal to a termination clause, a question that touches almost every written employment contract in the province. Until the Court releases its reasons, every Ontario termination clause that uses this language sits in genuine uncertainty.
"The Court of Appeal's decision to allow multiple interveners confirms that termination clause drafting remains a live and important issue across Ontario workplaces. The appeal reflects the broader need for clarity in how employment standards protections are applied in written contracts."
Christopher Achkar, employment lawyer and founder of Achkar Law
Key lessons for Ontario employers
Treat "at any time" as a live risk
This is the exact language that struck down the clauses in Dufault and Baker, and its fate is now before the Court of Appeal. There is little upside to including it and real downside, so the prudent choice is to remove it from your termination provisions.
Define "Cause" by the ESA standard
Tie your for-cause language to the ESA's wilful misconduct threshold rather than the broader common law idea of just cause. An over-broad cause definition is one of the most common reasons a termination clause is struck, and fixing it is high value.
Remember that one defect sinks everything
Under Waksdale, a single non-compliant provision voids the entire termination scheme, including an otherwise valid without-cause cap. Review every part of the termination language together, because a flaw in one place contaminates the whole.
General ESA language will not save a bad clause
A blanket statement that the contract complies with the ESA does not rescue specific wording that offends it. Compliance has to be built into the operative language of each provision, not bolted on as a savings clause.
Do not wait for the appeal to act
You do not need to know the outcome to protect yourself. Drafting agreements that would hold up even under the stricter Dufault and Baker approach means your contracts are defensible whichever way the Court of Appeal rules.
Review your agreements on a schedule
Termination clause law is moving quickly and remains unsettled. Contracts that were standard a few years ago are routinely being struck down today, so periodic review against current case law is no longer optional.
Will your termination clauses survive whichever way the Court of Appeal rules?
With Baker and Li reserved at the Court of Appeal, the safest agreements are the ones that do not depend on a contested phrase. A review now means your contracts hold up no matter how the decision comes down.
Audit My Agreements Or call us: 1-800-771-7882How Achkar Law helps employers
Achkar Law advises Ontario employers on the enforceability of termination clauses and the drafting of compliant employment agreements, and is actively involved in this area of law, including as counsel in the Baker matter now before the Court of Appeal. We review and update agreements, assess termination clause risk, and advance and defend wrongful dismissal claims.
Related resources
For the rule that one invalid part can void an entire termination clause, see our summary of Waksdale v. Swegon North America Inc. (2020 ONCA 391).
For the companion appeal where a court upheld an "at any time" clause, see our summary of Li v. Wayfair Canada Inc. (2025 ONSC 2959).
For drafting and reviewing employment agreements, see our employment agreement services.
Call us at 1-800-771-7882 for a confidential consultation.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©