Loco-motive for rail worker accused of corporate espionage

The CN Rail employee is thought to have shared valuable business information with the company’s biggest rival.

Loco-motive for rail worker accused of corporate espionage
Two major Canadian rail companies are set to battle out an espionage claim in court after a worker defected from one organization to the other – allegedly taking confidential and incredibly valuable information with him.

Canadian National Railway Co. claims former employee Greg Shnerer downloaded pricing information, customer contracts and the corporate business plan – only to quit days later, absconding to industry rival Canadian Pacific Railway Ltd.

“He left the employ of CN, taking with him confidential and proprietary information belonging to CN for the purpose of using it in the business of CP to unfairly compete with CN,” the company alleges in a statement.

Team effort

CN also insists Shnerer didn’t act alone but was in fact encouraged to spy on operations by CP manager Derek Ackford.

Ackford – himself a CN employee until about a year ago – had been in telephone contact with Shnerer 52 times during the month of June, according to a court affidavit.

“Prior to his resignation and while still employed by CN, Shnerer acted in collaboration with Ackford to injure CN through unlawful means,” CN said in court filings.

Damage done

Montreal-based CN claims Shnerer’s actions hurt the company financially, resulting in lost revenue and reduced market share.

“The information which Shnerer removed from CN was and continues to be commercially and operationally sensitive in that it permits CP to directly compete with the rates and pricing offered by CN to its clients, as well as CN’s overall business strategy and plans in respect of future prospective clients and business,” CN said in the statement of claim.

Now, CN is not only seeking an order stopping its rival from using the “stolen” information but it’s also demanding a return of the “unjust gains” CP has already made as a result plus $2 million in damages.

The company is also asking for access to all computers, smartphones, memory cards and other digital storage devices used by both Shnerer and Ackford.

Legal hope

While none of the allegations have been proven in court, employment lawyer Ashley Brown says trade secrets could easily put employers at risk.

“If somebody you’ve hired from another organization gives up trade secrets or proprietary information from their former employer – and you utilize that to your advantage – then you could be at risk,” she told HRM.

“Generally speaking, employees are permitted to accept new employment that may compete with their former employer – and while it is permissible to use the general knowledge and know-how they acquired during their time with their former employer in their new role – it would be unlawful to use trade secrets, proprietary information or customer lists against their former employer,” she added.

However, while it may sound cut-and-dry, Brown says the case would only stand up in court if the spurned company could prove it had suffered some sort of damage or negative repercussion.

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