US:Court ruling jeopardizes Ford
Court ruling jeopardizes Ford
Automaker ordered to turn over sensitive papers to an ex-top executive who is suing.
By David Shepardson / The Detroit News
DETROIT - The "crown jewels" of Ford Motor Co.'s competitive strategy are at risk if a federal judge doesn't reverse a ruling in the civil lawsuit of a former top executive.
The Dearborn automaker has been ordered to turn over sensitive documents to Martin Leach, the former president of Ford Europe, who became CEO of Maserati in June.
It's the latest development in a legal battle between Ford and Leach over the executive's abrupt departure from the company last year.
Leach is seeking millions of dollars in damages from the automaker he claims unfairly blocked him from taking a high post with Italian automaker Fiat Auto SpA.
A ruling by U.S. Magistrate Judge Donald A. Scheer allows Leach to keep Ford documents at his British home "containing trade secrets which may be described as the crown jewels of Ford's competitive strategy for the next five to 10 years," Ford attorney Donald Dawson wrote in a court filing late Friday in U.S. District Court.
Leach "will have virtually unlimited time and freedom to study, analyze, assimilate and remember these documents ... From Ford's perspective, it brings the henhouse to the fox."
During a Sept. 9 court hearing, Ford attorneys said there are about 1,500 pages of sensitive documents at issue.
Attorneys for Leach say they need the documents to prove that Ford tried to block his move to Fiat.
In November 2003, Leach filed suit against Ford and successfully won a court order in January barring Ford from enforcing a non-compete clause in his employment contract.
The suit continues as Leach seeks damages from Ford for preventing him from taking the job. Ford countersued Leach in December.
Ford said it had never been required to turn over documents like these, and it asked U.S. District Judge Paul Borman to reverse the ruling.
"Documents containing trade secrets of this critical nature have never been produced in any Ford litigation," the filing said.
In August 2003, Leach, then the president of Ford Europe, met with executive vice president David Thursfield, saying he had "lost faith in senior management" at the company and wanted to negotiate "alternative employment."
He had already received an offer to run Fiat Auto, the struggling Italian automaker that is 10 percent owned by General Motors Corp.and has a controlling stake in Maserati.
Ford took his comments as a resignation, though Leach insisted he was careful not to resign without assurance that he could accept the Fiat job.
Leach had a non-compete clause in his contract if he resigned. If he was fired, he was free to seek employment with a Ford rival.
Borman agreed that Leach had not quit and issued an injunction in January preventing Ford from trying to stop Leach from working for another automotive company, saying Leach would be irreparably harmed without it. In April, Ford dropped its efforts to enforce the agreement, but the suit continues as Leach seeks financial compensation for losing his offer to run Fiat, which had promised to pay him up to $4 million annually.
Leach was under scrutiny this summer after Ford of Europe posted a $525 million dollar second quarter loss, a result the company said was very disappointing.
Last month, Scheer ordered Ford to turn over numerous documents, including e-mails between Ford Chairman Bill Ford Jr., Nick Scheele and Thursfield between June and October 2003.
The trade secrets include "business plans, strategies, tactics, manufacturing know-how, good will, (and) sources of supply."
Leach's attorneys insist they are hamstrung by the fact that Ford has refused to identify the trade secrets - or even the issues surrounding them - that are at risk if the documents are turned over.
"Ford responded by identifying the so-called trade secrets with vague, wide-ranging references to general categories," Leach attorney Thomas Hathaway wrote.
The trial is set for March.
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My next Ford.....