RealTime IT News

Sprint Names Gary Forsee as CEO

Number four telecommunications company Sprint has named Gary D. Forsee as its chief executive officer, ending at least for now a legal tussle that broke out over the former BellSouth executive's decision to join a competitor.

But the 52-year-old Forsee joins the company with some restrictions imposed on his activities after an arbitrator was called in to settle trade secret issues between Sprint and Forsee's former company. BellSouth , in a statement, said it would still pursue legal action against Forsee.

Forsee succeeds William T. Esrey, who is stepping down, reportedly over his participation in a controversial tax shelter. The 63-year-old Esrey is expected to stay on as chairman of Sprint to help in the transition, the company said.

A few weeks ago, BellSouth cried foul over Forsee's decision to go to a competitor, arguing that a non-compete clause in his contract forbade him from doing so for 18 months.

By early February, a judge had issued Atlanta-based BellSouth a temporary restraining order that stopped Sprint from hiring Forsee.

Then a superior court in Atlanta tossed out covenants in Forsee's employment contract on the grounds that the non-compete aspects were too restrictive. Sprint said it would offer Forsee the job after 30 days.

But BellSouth then appealed sections of Forsee's contract that covered confidential business information, which went to an arbitration hearing. The appeal is also headed for Georgia's State Supreme Court. BellSouth and Cingular have also jointly filed an "interference" claim in federal district court against Sprint over the issue.

"We are pursuing these cases to ensure that the interests of BellSouth's shareholders are fully protected," the company said in a statement.

As part of BellSouth's request for an arbitration proceeding, Judge William Webster, the former director of the FBI, issued a decision that outlined some restrictions to protect BellSouth secrets, the company said.

The restrictions include barring Forsee to lobby on behalf of Sprint in some of BellSouth's operating territory in the southwest, and recusing himself from taking part in marketing plans that would compete directly with BellSouth and Cingular.

The restrictions also have to be acknowledged by the Sprint board of directors as a condition of Forsee's employment as CEO, the order said.

The legal wrangling underscored the intense competition between Sprint and BellSouth, which compete in long-distance and wireless markets, and raised questions over how effectively Forsee could lead the company while maneuvering through restrictions imposed by arbitration.

Foresee is a telecommunications veteran of more than 30 years. Prior to leaving BellSouth he was with Sprint for 10 years in its long-distance and PCS operations.

"It is a pleasure to be a part of this great company again," Forsee said in a statement. "Sprint has an impressive heritage of innovation and customer service. When you combine that with the company's strong financial position and enviable set of assets, you quickly realize the incredible potential Sprint possesses."

He joins Sprint at a time of market criticism regarding the use of a tax shelter by management officers. In addition to Esrey, Sprint's president and chief operating officer, Ronald LeMay, is reportedly stepping down over the use of the tax shelter.

Foresee was also named to Sprint's board of directors. The executive change is effective today.