Court found 'skip pending separation' notations proved systematic unfair treatment
A 59-year-old executive's wrongful dismissal case against IBM Canada has resulted in $682,151.18 in damages after internal company documents revealed a systematic practice of denying bonuses to employees who separated before payout dates—contradicting the employer's stated policies.
Ontario Superior Court Justice Parghi ruled on Jan. 27, 2026, that Jason Adelman was unfairly denied his 2022 discretionary bonus simply because he had left the company before bonuses were distributed in 2023.
Adelman worked for IBM for 18.5 years, rising to Executive Director of Strategic Partnerships before his termination without cause on Jan. 6, 2023. The court awarded him a 24-month notice period, damages for lost salary and benefits, a 2022 bonus of $24,227, and compensation for improperly cancelled restricted stock units and stock options.
When discretion becomes discrimination
IBM maintained that Adelman's zero bonus for 2022 reflected his work on a project that generated no revenue. However, Adelman's 2022 executive compensation statement contained a note stating: "For 2022 he separated before AIP [annual incentive program] payment date (for 2023 cycle) so he is not eligible for AIP payment." IBM offered no evidence from anyone who actually made the bonus decision.
When Linda Zaccardi, IBM Canada's Global Compensation Director, was asked whether executives ever received zero bonuses, she answered, "Yes, all the time." She later acknowledged on cross-examination that "it would not be fair for an employee to be denied a bonus only because of a pending separation."
The court found the bonus decision neither fair nor reasonable, writing: "Simply because a bonus is awarded in the sole discretion of an employer does not mean that it can be done in an arbitrary or unfair fashion or that the employer can decide that an employee should not get a bonus without following a fair, identifiable process."
The spreadsheet trail
Internal IBM "planning tool" spreadsheets proved devastating to the company's defence. A 2021 bonus allocation spreadsheet contained a comments column documenting reasons for zero bonuses. Some employees were marked "Skip – Low Performance." Others were marked "Skip – Pending Separation." One entry stated: "Separated on Jan 28, 2022. Not eligible for" bonus.
The court rejected IBM's explanation that "pending separation" didn't necessarily mean separation was the reason for the zero bonus, calling the interpretation inconsistent with "the plain meaning of the words of the document." Another spreadsheet showed all individuals who received zero bonuses in a particular group were no longer working there by year-end.
Justice Parghi concluded: "The record accordingly does not support IBM's position that its 2022 bonus decision in respect of Mr. Adelman was fair and reasonable. To the contrary, it leads me to conclude on the balance of probabilities that Mr. Adelman was given a zero bonus for 2022 simply because, by the time the 2022 bonuses were paid out, Mr. Adelman had left IBM."
Equity compensation and notice period
IBM also improperly cancelled Adelman's unvested restricted stock units and stock options scheduled to vest in February 2024, only acknowledging the error weeks before trial. This came despite a 2023 court ruling in Milwid v. IBM establishing employees' rights to equity vesting during notice periods.
The court awarded $269,508.27 for the cancelled equity based on when Adelman would likely have sold the shares — 402 days after vesting, matching his actual practice with equity that vested in 2023. Adelman's evidence was that he had a "passive investing" philosophy and that he "tended to leave things there" until he needed the money for something else.
The court found this approach appropriate for calculating the value of lost equity, stating: "I am to quantify the value of Mr. Adelman's loss of the RSUs and stock options 'on the basis of what would have probably happened' had he been employed until the end of the notice period."
