Canadian Pacific Railway Ltd. cannot be trusted to stop using confidential information taken unlawfully from rival Canadian National Railway Co. by a former employee, and a judge should appoint a monitor to watch over the company, CN told an Ontario court on Wednesday.
CN is seeking the appointment of a monitor to ensure that CP gains no further freight market share using information on clients, rates and contracts taken by then-CN salesman Greg Shnerer shortly before he quit to take a job in CP's sales office near Toronto in July, 2015.
Mr. Shnerer's actions spurred CN to file a lawsuit, which has yet to be heard, against him and CP, alleging it sustained unspecified damages and lost market share.
CN says Mr. Shnerer shared these lists of client names and shipping rates with CP's sales staff and executives, creating a target list of CN customers that were aggressively solicited.
CP has agreed to not solicit the business of CN clients, nor use other information it obtained when it hired Mr. Shnerer or another ex-CN salesman, Derek Ackford, in 2014.
CP and Mr. Shnerer have admitted to the misappropriation of the documents, but say the information is no longer in use at CP. CN's lawyer, Monique Jilesen, argued in court on Wednesday that she's not sure this is true, and alleged that CP failed to follow an earlier undertaking made in court not to share the information among its staff and managers, and used the information to take business away from CN.
CP likely still has some of the information, she said.
The rail company needs "something to give CN and this court some comfort the non-use order is being complied with," Ms. Jilesen told Justice Glenn Hainey of Ontario Superior Court. "This is not about the lawsuit, this about protecting CN's business today."
CP's lawyer Robert Harrison argued a monitor would be an "egregious overreach" that would give CN a competitive advantage by making it cumbersome for any CP sales staff to approach any customer.
Justice Hainey expressed doubt a monitor was needed, and said an order issued by him might be enough to ensure CP stays away from customers on a list agreed to by both railways for several months. "If they don't, they're in contempt," he said.
Justice Hainey said he would rule at a later date on the appointment of the monitor.