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Ontario Court Upholds Forum Selection Clause in Employee’s Favour
Employment disputes often begin with questions about termination, discrimination, or workplace mistreatment, but sometimes the most important issue is where the lawsuit should even be heard.
That is exactly what happened in Barnett v. Canadian Nuclear Laboratories Ltd., 2025 ONSC 6400, where an employer attempted to stop an employee’s lawsuit by arguing Ontario was the wrong place for the claim.
The Ontario Superior Court disagreed.
This decision reinforces the enforceability of forum selection clauses, the continuity of employment contracts through restructuring, and the significant implications for employers operating across multiple provinces.
This article explains what happened in the case, how the Court reached its decision, and the key legal lessons Ontario employers should take away to strengthen their contracts, reduce risk, and avoid costly jurisdictional disputes.
The Case at a Glance: What Happened?
Georgina Barnett worked at Whiteshell Laboratories in Manitoba, a site operated by Canadian Nuclear Laboratories (CNL).
She alleged:
- she was dismissed without notice
- she experienced gender-based pay inequity
- senior leadership created a toxic workplace
- discriminatory conduct contributed to her mental distress
- her employer acted in bad faith leading up to her termination
After her termination, Ms. Barnett commenced her claim in Ontario, relying on a forum selection clause contained in her original 2014 employment agreement with Atomic Energy Canada Limited (AECL), which stated:
- The Courts of Ontario have exclusive jurisdiction over any dispute relating to the employment relationship or its termination.
CNL sought to have the claim dismissed or stayed, arguing:
- the employment relationship and alleged conduct occurred in Manitoba
- Ms. Barnett lived and worked exclusively in Manitoba
- CNL was not a party to the initial AECL contract and the clause therefore no longer applied
- significant changes to her role over time invalidated the clause
- CNL also argued that Manitoba was the more appropriate forum.
What the Ontario Superior Court Decided
Justice Holowka rejected CNL’s motion and allowed the Ontario action to proceed.
1. The Ontario forum selection clause was valid and enforceable
The Court held that Ms. Barnett’s original AECL contract, including its Ontario forum selection clause continued to govern her employment, even after:
- AECL underwent restructuring,
- CNL took over operations, and
- her responsibilities evolved over time.
Because the transfer to CNL was seamless and no new contract replaced the original agreement, the clause remained binding.
2. CNL failed to show “strong cause” to disregard the clause
A party seeking to avoid a forum selection clause must show exceptional circumstances. CNL did not meet this standard.
The Court found:
- there was no unfairness in having the matter heard in Ontario
- most witnesses no longer lived in Manitoba
- key evidence was located in Ontario at CNL headquarters
- remote testimony reduced any inconvenience
- Ms. Barnett had legitimate juridical advantages in Ontario
3. Ontario had jurisdiction even without the clause (jurisdiction simpliciter)
Ontario had a real and substantial connection to the dispute because:
- CNL is incorporated and headquartered in Ontario
- Ms. Barnett regularly reported to senior personnel and board members in Ontario
- aspects of the managerial oversight and decision-making arose from Ontario
4. Manitoba was not the clearly more appropriate forum
CNL could not show that Manitoba was the better jurisdiction. Ontario remained the correct location for the dispute.
The motion was dismissed, and the Court ordered $20,000 in costs against CNL.
Why This Case Matters for Ontario Employers
1. Forum Selection Clauses Carry Significant Weight
Courts are reluctant to override a clear, well-drafted forum selection clause. Employers should ensure that:
- jurisdiction clauses are explicit
- contracts are updated during corporate restructuring
- employees receive enforceable agreements when roles materially change
2. Employment Contracts Can Survive Corporate Restructuring
The Court confirmed that an employee’s original agreement may continue to apply even after major organizational changes, unless a new contract replaces it with valid consideration.
3. Job Changes Alone Do Not Invalidate Contractual Terms
CNL argued the “changed substratum” doctrine applied, but the Court disagreed. The clause in Ms. Barnett’s contract explicitly stated it survived any changes in role, salary, or employment terms.
4. Multi-province Operations Create Legal Risk
Employers operating in more than one province must anticipate jurisdictional disputes and ensure contracts are consistent across locations.
5. Discrimination Allegations Can Influence Court Jurisdiction
Ontario courts permit discrimination allegations to be litigated as part of wrongful dismissal claims providing a legal advantage employees may not have in all provinces.
Protect Your Business with Strong Contracts and Litigation Strategy
The Barnett v. CNL decision confirms that:
- forum selection clauses are powerful tools
- employment contracts may continue through major corporate changes
- jurisdictional challenges require strategic, proactive planning
If your organization faces a wrongful dismissal claim, restructuring concerns, or contract-related risks, Achkar Law can provide guidance tailored to your business needs.
How Achkar Law Helps Ontario Employers
At Achkar Law, we assist employers across Ontario in strengthening their contracts, minimizing risk, and handling complex employment disputes.
We help businesses:
- Draft and update enforceable employment agreements
- Address risks related to restructuring and workforce transfers
- Defend wrongful dismissal, discrimination, and bad faith claims
- Manage jurisdictional challenges and multi-province employment issues
- Ensure promotions and job changes do not undermine existing contracts
Speak With an Employment Lawyer in Ontario
If your organization is facing a cross-province employment dispute, restructuring concerns, or questions about enforcing a forum selection clause, call: 1-800-771-7882
Strong contracts and early legal advice can prevent costly jurisdictional disputes.
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. ©