Sprint: BellSouth Exec to Be New CEO
Feb. 11, 2003
ATLANTA (AP) _ Sprint Corp. said Monday it plans to name BellSouth Corp.'s No. 2 executive, Gary D. Forsee, its new chief executive next month, after a 30-day period for arbitrating the companies' dispute over Forsee ends.
Sprint made the announcement after a judge dismissed BellSouth's argument that Forsee would violate a noncompete agreement in the contract by becoming Sprint's chief.
In a written ruling, Fulton County Superior Court Judge Stephanie Manis called that provision ``overbroad and unenforceable.'' But she said Forsee was bound by terms of a nondisclosure clause in his contract, which prevents him from revealing any confidential information to a competitor.
Manis extended a restraining order barring Forsee from joining Sprint for 30 days, but said the order would not be extended further. In a statement late Monday, Sprint said it would proceed with Forsee's appointment.
The language in Forsee's contract prohibits him from working for a BellSouth competitor for 18 months after leaving the Atlanta-based regional Bell, although Manis faulted the wording.
BellSouth contends that Forsee could not accept the Sprint job without disclosing key information related to BellSouth's business.
The case is to be heard in arbitration over the next 30 days.
Sprint and BellSouth sell long-distance service in nine Southeastern states and compete nationally for wireless customers.
``We're obviously pleased with the temporary restraining order staying in place for at least 30 days,'' BellSouth spokesman Jeff Battcher said. As for Sprint's announcement about its new CEO, Battcher said, ``How they know how the arbitrator will rule, they must have a crystal ball. We're a long way from determining the fate of Mr. Forsee.''
Forsee's attorneys did not return calls for comment.
BellSouth sued Forsee last month after he sought to leave to accept the chief executive position at Sprint, replacing William Esrey.
BellSouth is trying to prevent Forsee from divulging ``intellectual capital,'' including company pricing plans and merger and acquisition information.
``The potential harm to BellSouth, in the event that Forsee does disclose any confidential information, could be incalculable,'' Manis said in her 16-page ruling.
BellSouth and Cingular Wireless also filed lawsuits last Friday in federal court accusing Overland Park, Kan.-based Sprint of interfering in Forsee's contractual obligations.
Forsee, a former Sprint executive, oversees BellSouth's domestic operations and is also chairman of Cingular Wireless, BellSouth's joint venture with SBC Communications Inc.
As the case heads into arbitration, Forsee has continued to serve in his position. Should BellSouth win in arbitration, it is unclear what Forsee's role in the company would be, Battcher said.
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