Hunter Harrison, the former Chief Executive Officer of Canadian National Railway (CNR), faces a dilemma in dealing with his obligations under a non-compete covenant to his former employer. Harrison is being pursued by CNR competitor Canadian Pacific Railway to assume the position of CEO, but taking that position might violate the non-compete agreement.
Clearly, if a court finds that one party has been dishonest, it will have serious negative repercussions with respect to their chances of success. It can also result in a cost award against them. The question for today, however, is whether it is appropriate to also find parties who lie during the litigation process in contempt, and if so, what the appropriate penalty should be.