Ford in Court over Former Exec's Noncompete Pact

Ford Motor Co. has asked a US judge to enforce an agreement that would bar the former president of Ford Europe from working for any competitor for two years, saying trade secrets were at stake.

The request came in Ford's reply to a lawsuit by Martin Leach, who sued Ford last month claiming he was fired in August but illegally barred by Ford from becoming chief executive of Fiat Auto or working anywhere else in the auto industry.

If Leach went to work for Fiat or another automaker, "it would be impossible for Leach not to rely on and inevitably disclose ... the confidential and trade secret plans and strategies of Ford," the company said in a motion filed Wednesday.

The dispute centers on an Aug. 7 meeting Leach called with David Thursfield, the head of Ford's international operations, and a Ford human resources executive. Leach, a 27-year Ford veteran, said in his lawsuit he felt his job was in jeopardy after Ford Europe posted a shocking $525 million loss for the second quarter and his duties had been cut back.

Leach says Fiat Auto offered him the job of CEO on Aug. 1, contingent on Ford waiving the noncompete clause that is required of all top Ford executives. He said he raised his job concerns, the Fiat offer and modifying the noncompete clause in the Aug. 7 meeting and was told by Thursfield the company would consider his request.

Fired or Quit?

But Ford draws a different picture. It said Leach had been upset by a July audit that found he was spending too much money on Ford's motorsports operations and improperly taking a company helicopter to events. It also said Leach's offer from Fiat included an annual salary of 1.8 million euros - five times his Ford salary - and a 1 million euro signing bonus.

Ford said Leach told Thursfield that he had decided to leave Ford and had offers from two other companies. Ford said Thursfield and the other executive repeatedly asked Leach if he was certain, and Leach told them he had made up his mind.

When reminded of the noncompete agreement, Ford said Leach told the executives he thought the agreement was unenforceable.

Ford said when Thursfield told Leach the next day that the company had accepted his resignation, Leach claimed he had not resigned, and appeared "a bit shaken" at Ford's stance that it would not alter the noncompete agreement.

"You're firing me," Leach told Thursfield, according to an affidavit from Thursfield filed with the case. It said Thursfield replied: "No, I am not. You quit yesterday in full knowledge of the consequences."

On Aug. 12, Ford Europe announced Leach had "elected" to leave the company, and was being replaced with Mazda executive Lewis Booth. Leach's attorney did not immediately return calls seeking comment.

In September, Fiat Chairman Umberto Agnelli confirmed that Leach was a leading candidate to take the helm at Fiat Auto. But in October, Fiat named former Volkswagen executive Herbert Demel as the new CEO of its car unit. Leach said Fiat withdrew its offer after Ford told Fiat it would enforce the noncompete clause.

Ford Europe's efforts in recent years to cut costs, shut plants and launch new models had been held up as the model for the company's turnaround efforts in North America. But weak demand and pricing in Europe, combined with currency costs, has undermined its recovery. Ford announced some $650 million in additional restructuring costs at Ford Europe in October.