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Old 12-08-2003, 07:16   #1 (permalink)
Mr. Embargo
 
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USA: Ford asks court to bar former European head from rivals for two years

Ford has told a court that its former head of European operations would "inevitably" disclose trade secrets if he moved to a rival and should be barred from working for a competitor for two years, the Financial Times (FT) said.

The newspaper said Ford late on Friday responded to a €60 million ($US73 million) lawsuit from Martin Leach, who claims he was fired as president and chief operating officer of the European division this summer after discussing a job offer from Fiat with his superiors. The company denied that he was fired, saying in the court filing that he attempted to withdraw his resignation after realising that Ford would enforce a two-year non-compete clause in his contract, the report added.

The Financial Times noted that Ford's attempt to rely on trade secrets law to prevent Leach working for a competitor could break new legal ground in Michigan, where the lawsuit has been filed.

The FT said Leach has not threatened to use any confidential Ford data, but the company argues that it would be impossible for him to work in the industry and not take advantage of such information. If accepted by the court, this could stop any senior executive moving to a rival without a long period of ‘gardening leave’, the paper added.

According to the FT, Ford said, if Leach had been allowed to go to Fiat, "it would have been impossible for Leach not to rely on and inevitably disclose, whether intentionally or inadvertently, the confidential and trade secret plans and strategies of Ford".

The Financial Times said legal argument could allow Ford to enforce the two year non-compete agreement even if the court rules that Leach was, in fact, fired, something which renders most of the agreement invalid.

The paper said Leach is asking for compensation for being blocked from taking up the job as head of Fiat's automotive business, which was conditional on agreement from Ford to waive the clause.

The job would have earned him €1.8 million a year with a €1 million signing-on bonus, but Volkswagen veteran Herbert Demel has since been appointed by Fiat, the FT noted.
According to the Financial Times, Ford's legal filing also points out that Leach has not repaid the company for the shares, worth one year's salary, which he was given last year as an incentive to sign the non-compete clause.
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Old 12-08-2003, 20:39   #2 (permalink)
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Re: USA: Ford asks court to bar former European head from rivals for two years

This will make an interesting outcome. Previous attempts at such clauses have been denied to be a restraint of trade by most courts but this might well add a new slant.

Cheers
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