Thirteen workers claim employer ‘changed the rules that would have paid them out between one and two years of their annual salary’
Thirteen former employees of the Alberta Law Foundation (ALF) have filed a $2‑million lawsuit alleging the organisation breached their employment contracts by refusing to honour a change‑of‑control compensation policy after they resigned, according to a report.
In a statement of claim, the plaintiffs say ALF “changed the rules that would have paid them out between one and two years of their annual salary” only after they resigned en masse in early January 2026, reported CBC.
They argue they were entitled to lump‑sum payments under a policy that had been unanimously approved by ALF’s board in March 2025, according to the report.
The lawsuit characterises the dispute as a straightforward breach of contract, asserting that a qualifying change of control occurred, that the employees resigned in reliance on the policy, and that ALF then declined to provide the separation packages they say were promised.
None of the allegations in the statement of claim have been proven in court.
Compensation (99%) is one of the aspects of the employee experience most crucial to Canadian workers, regardless of their organisation’s size or sector, according to a previous report.
‘Change of control’
According to the statement of claim, the March 2025 policy entitled employees to between one and two times their annual base salary, depending on length of service, if there was a “change of control” at the organisation and they chose to resign.
The policy identified specific triggers, including circumstances in which Alberta’s justice minister gained power over a majority of ALF’s board or where ALF ceased to function as an arm’s‑length body from the government, CBC reported.
The former staff say that threshold was met in December 2025, when Bill 14 – the Provincial Electoral Legislation Amendment Act, 2025 – granted the justice minister authority to dictate and write bylaws for ALF and to appoint most of its directors.
“As a result of Bill 14, ALF was no longer an arm’s‑length organization independent from the Government … and the minister obtained the power to appoint a majority of the ALF Board,” the lawsuit states, as cited by CBC.
ALF is funded through interest on Alberta lawyers’ pooled trust accounts and plays a major role in financing legal non‑profit work in the province. In the 2024‑25 fiscal year, it distributed 126 grants totalling $65.8 million, and its 2025 annual report listed reserves of more than $280 million, according to CBC’s reporting.
Funding tensions, board turnover and ALF’s response
The lawsuit comes after a period of mounting tension between ALF and the provincial government.
CBC has reported that in March 2025 the province introduced Bill 39, the Financial Statutes Amendment Act, which required justice minister approval for ALF funding commitments over $250,000.
At that time, then‑executive director Byron Chan, now among the plaintiffs, told CBC the government was “meddling with which groups received grants from its funds” and alleged that about $10 million in already‑approved non‑profit grants had been rejected or reduced.
The statement of claim says all 13 plaintiffs resigned on Jan. 5, 2026, giving two weeks’ notice and relying on the change‑of‑control policy. Nine days later, four people from Optimus SBR, a management consulting firm hired by the board, arrived at ALF’s offices and told staff they were “relieved of their duties effective immediately,” according to CBC’s account of the lawsuit.
The plaintiffs say they then received letters from ALF’s legal counsel stating that “ALF was refusing to pay each of the plaintiffs the separation package to which they were entitled,” and allege the foundation suggested the policy was neither valid nor applicable.
The lawsuit also notes that by Jan. 14, 2026, all seven directors who had approved the March 2025 policy had either been removed from or resigned from the board, according to the CBC report.
The current seven‑member board now includes three directors appointed by the justice minister — including new chair Shamsher Kothari — two from the Law Society of Alberta and two chosen by the board itself, according to the new article.
In a brief written statement to CBC News, Kothari confirmed receipt of the lawsuit and said, “We look forward to submitting our statement of defence in the days ahead.”
Previously, a British Columbia court found an employer liable for more than $45,000 in unpaid overtime pay, plus punitive damages for trying to intimidate the worker with a meritless counterclaim – even though the worker didn’t claim any punitive damages.
