There has been considerable discussion in recent months about the growing use of arbitration clauses in employment relationships. A recent decision of the Aspen Technology, Inc. v. Wiederhold provides a helpful—and in some respects cautionary—illustration of how Canadian courts are approaching these clauses.
The Dispute
The case arose from what, at first glance, appears to be a relatively straightforward compensation dispute. The employee, a senior executive, claimed approximately $103,000 in unpaid bonuses and commissions under an earlier incentive plan. His employer had replaced that plan mid-year with a less generous one and calculated his compensation accordingly. Rather than focusing on the merits of the compensation dispute, however, the employer relied on an arbitration clause contained in the incentive plans. That clause required disputes to be resolved by arbitration in Boston, Massachusetts, under Delaware law.
The employee commenced a court action in British Columbia. The employer responded with an application to stay the action in favour of arbitration.
The Lower Court: A Familiar Resistance
The chambers judge refused to stay the action, finding the arbitration clause to be “void and inoperative” for several reasons:
- lack of fresh consideration
- conflict with the Employment Standards Act
- and concerns about cost and accessibility (the so-called “brick wall” problem)
These are familiar arguments. Courts have, particularly since Uber v. Heller, shown a willingness to scrutinize arbitration clauses in employment contexts where they appear to deprive employees of meaningful access to justice.
The Court of Appeal: A Reset
The British Columbia Court of Appeal took a markedly different approach. It allowed the appeal and stayed the action in favour of arbitration. In doing so, the Court reinforced three important principles.
- Arbitration Clauses May Be Part of the Original Bargain
The lower court treated the arbitration clause as a later addition requiring fresh consideration.
The Court of Appeal disagreed. It held that the employee’s original employment agreement contemplated participation in the incentive plan “on its terms”—and those terms included arbitration from the outset. 
There was therefore no post-contractual change and no need for fresh consideration.
Takeaway:
If an employment contract incorporates a plan or policy “on its terms,” those terms—including dispute resolution provisions—may be binding even if provided later.
- Courts Will Not Speculate About Foreign Law
The chambers judge concluded that applying Delaware law would effectively deprive the employee of protections under the Employment Standards Act.
The Court of Appeal rejected this reasoning, emphasizing that courts cannot make assumptions about foreign law without proper expert evidence. 
Without that evidence, there was no basis to find the clause contrary to public policy.
Takeaway:
Challenges based on foreign law must be proven, not assumed.
- The “Brick Wall” Argument Is Only the Beginning
The lower court was concerned that the cost of arbitration (estimated at tens of thousands of dollars) would effectively prevent the employee from pursuing his claim.
The Court of Appeal acknowledged that such concerns may justify the court stepping in—but only as a first step. The court must still go on to determine whether the clause is actually unconscionable.
Here, that analysis was never completed. 
Takeaway:
High cost alone does not invalidate an arbitration clause. It opens the door to further analysis—it does not end it.
Practical Implications
For Employers
This decision will be seen as encouraging.
- Properly drafted arbitration clauses remain enforceable—even in employment contexts
- Incorporation by reference can be effective
- Courts will respect the legislative direction favouring arbitration unless a clear basis exists to refuse it
However, caution remains warranted:
- overly onerous or inaccessible arbitration schemes may still be struck down
- Uber v. Heller remains good law
For Employees
The decision is a reminder that:
- arbitration clauses can significantly limit access to the courts
- signing on to compensation plans or policies may have broader legal consequences than expected
- challenges to arbitration clauses must be carefully constructed and supported by evidence
In particular, arguments based on:
- public policy
- foreign law
- or cost barriers
must be grounded in a proper evidentiary record.
A Broader Trend
This decision reflects an ongoing tension in Canadian law:
- on one hand, a strong policy favouring arbitration
- on the other, a concern about fairness and access to justice in employment relationships
In Wiederhold, the Court of Appeal clearly leaned toward enforcing the parties’ contractual bargain.
Whether future cases will recalibrate that balance remains to be seen.
Final Thought
For lawyers advising both employers and employees, the message is clear:
- Arbitration clauses matter—and they are being taken seriously.
- Ignoring them, or assuming they can be easily set aside, is no longer a safe approach.