In May 2006, WestJet Airlines apologized to rival Air Canada and agreed to pay it $5.5 million for investigation and legal fees plus donate $10 million to children’s charities to settle a lawsuit. In 2004, Air Canada sued WestJet and several of its executives, in Ontario Superior Court, for $220 million. It is alleged a former Air Canada employee, now employed by WestJet, passed on confidential, proprietary information to WestJet. It was alleged that the former Air Canada employee, who continued to have access to an Air Canada web site for the limited purpose of booking personal travel, gave his password to a WestJet executive. Apparently WestJet accessed Air Canada’s web site approximately a quarter of a million times and created automated technology to download and analyze passenger load and booking information. By obtaining this confidential information, Air Canada claimed WestJet was able to compile computer-generated reports for its own strategic planning, routing and pricing decisions. WestJet countered with accusations that Air Canada hired private investigators to sift through an executive’s garbage then had a U.S. firm digitally reconstruct shredded documents.
What obligations did WestJet have to Air Canada as a result of the decision to hire one of their former employees? Were WestJet’s actions wrong or were they just taking advantage of lax security?