RealTime IT News

Motorola Sues Nortel CEO

Motorola has filed a suit against Mike Zafirovski, its former president and chief operating officer.

Zafirovski was just appointed president and chief executive officer of Nortel Networks this week, and scheduled to officially take over at Nortel on November 15.

Motorola is seeking compensatory damages and an injunction to prevent Zafirovski from working at Nortel for two years, following the terms of his contract with Motorola, which started in July 29, 2005.

The suit, filed in the circuit court of Cook County, Ill., alleges that Zafirovski breached various agreements with Motorola by accepting the position with Nortel, and that his executive position there will inevitably result in the use or disclosure of Motorola's trade secrets.

Nortel issued a statement that the company and Zafirovski are reviewing the lawsuit and intend to pursue discussions with Motorola with "a view to resolving the dispute over Zafirovski's appointment." Company officials declined to comment any further.

A copy of the suit obtained by internetnews.com states:

"Despite being paid millions of dollars in cash, stock and stock options in exchange for Zafirovski's simple agreement not to take a position with a competitor during the two years following his departure from the President and Chief Operating Officer position at Motorola, Zafirovski willfully and deliberately violated the reasonable non-compete agreements which he agreed to in writing on no less than eight separate occasions while employed by Motorola."

"We take these matters seriously, and we will do what's necessary to protect the company," Motorola said in a statement.

"He (Zafirovski) had a non-compete, and Nortel is a direct competitor to our infrastructure business," Jennifer Weyrauch, director of corporate communications at Motorola, told internetnews.com.

From 1975 to 2000, Zafirovski served with General Electric as president and CEO of GE Lighting; president of GE Capital Mortgage Corporation; and president and CEO of GE Capital Fleet Services. He was president and COO of Motorola since 2002, after serving as president and CEO of the company's personal communications sector.

In April 2004, Nortel fired president and CEO Frank Dunn amid ongoing questions about the company's accounting. The telecom giant also dismissed CFO Douglas Beatty and controller Michael Gollogly.

This is the latest high-profile suit in the high tech industry over an executive hire. Microsoft sued Kai-Fu Lee and Google for violating a non-compete agreement that Lee signed when he went to work for Microsoft.