A court case pitting Canada's two major railways against each other over CP's hiring of a former CN CEO has been settled -- just as another CN executive jumps to join him.
CN (Canadian National Railway) on Monday announced it has "settled its differences" with CP (Canadian Pacific Railway) and with CP's new CEO Hunter Harrison, who retired from CN at the end of 2009.
Harrison was installed as CP's CEO last summer as per the wishes of a major activist shareholder, New York investment firm Pershing Square Capital Management.
CN last fall cancelled payouts from Harrison's retirement plan and restricted stock units after deciding he was "likely in breach" of non-compete and non-disclosure conditions in his CN contract after going to work for CP.
Montreal-based CN on Monday would not comment on any other terms of the settlement, which ends the case between the companies before a U.S. Federal Court in Chicago -- except to say in its release that CP has now "undertaken not to hire certain CN employees" until Dec. 31, 2016.
That agreement, however, doesn't appear to cover CP's latest hire: CN's executive vice-president and chief operating officer Keith Creel, who was announced Monday as president and COO at CP, effective Tuesday (Feb. 5).
Creel, who became CN's COO in 2010, started in the railway business as a management trainee at U.S. railway Burlington Northern in 1992.
A CN spokesman said Monday the company would not comment on whether Creel had a non-compete agreement or would face legal action for jumping to Calgary-based CP.
"We wish Keith success in his new role and are pleased to turn the page with respect to the matter of CP's hiring of CN's former CEO," CN CEO Claude Mongeau said in Monday's release, which noted CN has a "deep bench of executive talent" and would name a replacement for Creel "shortly."
"I have worked with many talented operating people in this industry over the last four decades and Keith is by far one of the best young operating talents that I have ever seen," Harrison said in CP's announcement Monday.
Creel, in CP's release, said he's "proud to be working alongside (Harrison) once again (and) to be leading an outstanding team in sales and marketing and operations that I know to be exceptionally talented railroaders."
Four top CP executives -- its executive vice-president Jane O'Hagan and three senior vice-presidents -- will now report to Creel.
CN on Monday also announced it will untie its brand from one of its major sponsorships. The railway said it plans to expand its sponsorship of CN Future Links, Canada's national junior golf program, but will "step away" after 2013 as title sponsor of the Canadian Women's Open and Canadian Women's Tour.
