Nortel Networks has agreed to pay Motorola $11.5m
(£6.8m) for the right to hire former Motorola president and chief
operating officer Mike Zafirovski.
Zafirovski left Motorola in February and last month Nortel
Networks announced it had hired him to replace Bill Owens as its
new chief executive officer.
In response, Motorola immediately filed a lawsuit citing
non-compete clauses in Zafirovski’s previous employment contract,
which it said prevented him from joining Nortel – a big rival of
Motorola’s in network infrastructure and other technologies.
A settlement to the legal action now allows Zafirovski to join
the company, provided he pays back the $11.5m he received from
Motorola when he left. This amount will be covered by Nortel.
Motorola had sought to prevent Zafirovski from joining Nortel
for two years and to block him from hiring Motorola employees for
Nortel.
Under the terms of the settlement, Zafirovski and Nortel have
agreed not to recruit Motorola employees and to limit his
communications with certain unnamed companies, which include
Motorola customers.
The settlement also limits Zafirovski's ability to advise Nortel
“on competitive strategy or analysis relative to Motorola”, Nortel
said.
Zafirovski is due to start at Nortel on 15 November.