Press Releases

ISPLA NEWS: Competitive Intelligence or Spying?

Dick’s Sporting Goods Accuses Rival Modell’s of Spying

On March 4, 2014 ABC News covered a lawsuit filed in New Jersey Superior Court for Mercer County wherein Dick’s Sporting Goods alleges competitor Modell’s of civil conspiracy and trespass due to subterfuge by its CEO Mitchell Modell. 

ABC News quoted ISPLA board member, attorney Richard Horowitz, an expert on ethics, for his opinion in this matter. They also commented on codes of ethics regarding  “what is and isn't permitted when one competitor snoops on another.” The coverage also mentioned the Society of Competitive Intelligence Professionals (SCIP), and that organization’s code of ethics, which expressly prohibits concealing one's true identity. 

Richard Horowitz, an authority on trade secrets and competitive intelligence law, helped the SCIP revise its code in 1999. He tells ABC News that, while he has not read Dick's complaint and cannot comment on pending litigation, he can speak to the general question of when snooping becomes illegal.

As a general rule, he says, it's illegal for an information-seeker to use "a misrepresentation, a trick or some gimmick" that causes the holder of a trade secret to breach their duty to keep it confidential. 

"That's the test: Have you induced someone to breach their duty of confidentiality?" he says, adding that if yes, then you've broken the law. "If I call you up and say, 'I'm working for the CEO, and he wants you to fax me Document X, which contains a trade secret,' and you do so, then my misrepresentation caused you to breach your duty of confidentiality."

It's both common and permissible, he says, for rival retailers to keep tabs on one another, to stroll around the public areas of one another's stores and make competitive use of whatever information they have gained. Nor are they under any obligation to declare themselves to be the competition, unless asked. "Companies generally have a policy that requires their employees to identify themselves truthfully," he says.

"A legal line is drawn where a misrepresentation induces a breach of confidentiality on the part of the information holder," he said.

The ABC News item on corporate espionage is at:

Dick's Sporting Goods Accuses Rival Modell's of Spying, ABC News, March 4, 2014


ISPLA is fortunate to have the services of Richard Horowitz on its board. I have had the pleasure of being a speaker with him on ethical pitfalls confronting professional investigators, certified fraud examiners and attorneys at the ALDONYS/NCISS conference in NYC, Intellenet Conference in Sorrento, Italy and at the Los Angeles Chapter of the Association of Certified Fraud Examiners.

Bruce H. Hulme, CFE

ISPLA Director of Government AffairsNY ACFE Legislative Liaison Board member