Technology firm Nortel Networks has agreed to pay Motorola £6.8m after recruiting its former president and chief operating officer.
Mike Zafirovski, who left Motorola in February, was announced as the new chief executive officer at Nortel last month.
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 technology.
But a settlement to the legal action now allows Zafirovski to join the company, provided he pays back the £6.8m 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.
Zafirovski is due to start at Nortel on 15 November.