Question: Corporate Espionage in the Canadian Airline Industry
Sneaky moves, claims of corporate espionage, and shredded documents. This is not a fictitious spy thriller, but a true story of rivalry in the Canadian airline business. The companies involved are Air Canada, its arch enemy WestJet Airlines, and rival Jetsgo. All were locked in a ruthless battle for passengers. The story began when one of the founders of WestJet, Mark Hill, gained access to Air Canada's protected website through a password from a former Air Canada employee. In the website, Hill found information on Air Canada's routes and the number of passengers on planes. This kind of corporate snooping happens a lot more than people think, especially in high-tech firms, very competitive industries, and industries that are at the cutting edge of development. "Information is power," Hill says. "One of the reasons we were so successful is that we knew more about this business than the other discount airlines that were trying to get going around this time," he adds. Air Canada might never have known that Hill had accessed its protected website, except a whistle-blower from WestJet tipped Air Canada off. By the time he was revealed, Hill had accessed the website 243 000 times in less than a year. In another twist in this tale, Air Canada sent private investigators to Hill's home in Victoria, BC, to do a little digging of their own. The investigators dumped all the shredded paper in Hill's garbage into their pickup truck, which caught a neighbour's attention.
The neighbour informed the police and Hill. A few weeks later, the private investigators were back for more garbage, but this time Hill was ready for them, with a camera. His pictures showed up on the front page of one of Canada's national newspapers, proof of Air Canada's "dumpster digging." After Air Canada pieced together the retrieved shredded documents, it launched a $220-million lawsuit against WestJet, accusing it of a malicious attempt to take away business and schedule competing flights. WestJet responded with a countersuit, accusing Air Canada of trespassing and stealing private property. Michel Leblanc, president of the discount airline Jetsgo, claimed some of his company's private documents were also found in Hill's garbage. Jetsgo filed a lawsuit against WestJet for $50 million. WestJet President Clive Beddoe eventually apologized to his employees and shareholders about the situation. Beddoe said, "I have to take responsibility for this event as I should have known what Mark Hill was doing. Neither I nor the board condone this sort of activity. . . . Furthermore, we have introduced a new corporate whistle-blowing policy . . . we have no intention of letting a situation like this happen again." Hill subsequently resigned from the company. By the end of May 2006, WestJet and Air Canada had settled their dispute, with WestJet paying $5.5 million for Air Canada's investigation and legal fees, and $10 million to children's charities. Jetsgo filed for bankruptcy in March 2005.
1. Using the four ethical decision-making criteria (utilitarianism, rights, justice, and care), assess the ethics of WestJet Airlines' and Air Canada's actions.
2. What were the factors influencing ethical or unethical decision-making behaviour of the main characters in this airline saga?
3. What could WestJet do to prevent this type of ruthless, corporate espionage behaviour in the future?