Wiederhold v. Aspen Technology, Inc., 2024 BCSC 1731

Naz Mitha, KC and Ivo Martinich represented the plaintiff-employee, Mr. Wiederhold, to successfully oppose his employer’s application to have his claim for unpaid bonuses and commissions dealt with by a panel of three arbitrators in Boston, Massachusetts, instead of in the BC Supreme Court. 

Facts 

Mr. Wiederhold is a senior sales account executive with Aspentech Canada Corporation (“ACC”). 

On July 10, 2008, ACC and its parent company (“Defendants”) offered Mr. Wiederhold employment in a letter setting out the proposed terms of his employment. Mr. Wiederhold signed the offer letter and started employment on July 15, 2008. 

The offer letter signed by Mr. Wiederhold was silent on dispute resolution mechanisms. Later, during his employment, Mr. Wiederhold signed an incentive plan containing a dispute resolution clause stating that all claims are to be resolved exclusively by arbitration in Boston, with all arbitrator fees and expenses shared equally between the employer and employee. The clause also required the application of the substantive law of Delaware to resolve any disputes under the incentive plan. 

Parties’ Positions and Decision

The Defendants applied for a stay of Mr. Wiederhold’s BC court action, arguing that Mr. Wiederhhold’s claim should be resolved in accordance with the incentive plan, by a panel of arbitrators in Boston.

Mr. Wiederhold opposed the Defendants’ application taking the position that the arbitration clause should not be enforced for the following reasons:

1. Mr. Wiederhold received no fresh “consideration” in exchange for the arbitration clause;

2. The arbitration clause is contrary to public policy as it deprives him of the protection of the mandatory provisions of the BC Employment Standards Act;

3. The arbitration clause is unconscionable, particularly in view of the disproportionate cost to Mr. Wiederhold of pursuing arbitration;

4. The arbitration clause in the agreement is coupled with a forum selection clause that is itself unenforceable.

In the result, the Court found in Mr. Wiederhold’s favour, declining to stay his BC action and finding that the arbitration clause was void and inoperative for three key reasons. First, the employer provided no fresh consideration for the incentive plan, including the arbitration clause. Second, the terms of the incentive plan had the effect of circumventing mandatory provisions of the BC Employment Standards Act – namely, the employee’s entitlement to “wages”. Third, the disproportionate cost of pursuing arbitration in Boston meant there was a real prospect that enforcing the arbitration clause would effectively prevent the dispute from being resolved at all.  

As the successful party, Mr. Wiederhold was awarded costs relating to the application.