BLOWI
THE
WH
ON
FR
CNR discovers
financial incentives
have prompted
disgruntled employees
south of the border to
cash in on legislation.
by Jim Middlemiss
30 February 2014
INHOUSE
C
anadian corporations need to
embrace whistleblowers if they
operate or trade in the U.S.,
where a new bounty system
and greater protections have
created a favorable environment for whistleblowing, legal experts say.
"U.S. employees are aware of the legislation and are taking advantage of it," says
Andrew Gray, a litigator at Torys LLP in
Toronto.
The attention paid by Canadian businesses to whistleblowing intensified last
year when Canadian National Railway Co.
became one of the first Canadian companies
to be sued under whistleblower protections
set out in the Sarbanes-Oxley Act.
Timothy Wallender, a trainmaster at the
CNR's Harrison Yard in Memphis, Tenn.,
sued his former employer claiming he was
fired after raising concerns that the company's dwell time statistics were false.
The complaint, filed in the Western Dis-
trict of Tennessee, alleges a key measurement of a railway's efficiency is the length
of time railcars spend in a terminal before
being sent out in a newly assembled train,
known as "terminal dwell time" — the
longer the dwell time, the less efficient the
operation.
The complaint alleges "favorable statistics on terminal dwell at Harrison Yard are
based on persistent and pervasive fraud,"
which CNR denies.
The complaint argues "statistics about a
railroad's dwell time are material to shareholders and prospective shareholders when
deciding whether to buy, hold or sell the
railroad's shares."
Wallender claims supervisor Andrew
Martin ordered employees to "falsely list
trains as having departed from the Harrison Yard even though the trains had not
left the yard" and told employees to change
CNR computers to show trains left the yard
30 minutes earlier than they did. Wallender
