With one trip to a Texas court, Motorola Inc. may have secured what a six-figure payment could not in its bid to keep employees from trooping after a former top executive to Advanced Micro Devices Inc.
A lawsuit filed on Thursday by Motorola charges that Hector Ruiz, former head of the Schaumburg, Ill., company's Semiconductor Products Sector (SPS), lured a senior financial officer of Motorola to AMD, and seeks unspecified relief and damages.
By suing only Ruiz and not AMD, Motorola avoids souring its relationship with the Sunnyvale, Calif., processor maker, with which Motorola is jointly developing copper technology in Austin, Texas, and Dresden, Germany, and where Ruiz is now president and chief operating officer.
Analysts said the case marks an attempt by Motorola to enforce an agreement it had instituted to ensure that it doesn't lose core employees in a difficult labor market.
"Motorola is approaching this without making a stink with AMD because there's really no bad blood between the two companies," said Dan Scovel, an analyst at Needham & Co. Inc., New York. "The action sends a message to Motorola's employees and people they're cutting deals with that 'we expect you to live up to any agreements made.' "
The Motorola lawsuit was sparked by last week's appointment of Robert Rivet as chief financial officer of AMD after 24 years at Motorola, three of them as director of finance under Ruiz.
Motorola said the appointment breached the terms of Ruiz's separation from Motorola in January, when he received a "substantial six-figure amount in return for his promise not to solicit or induce certain members of Motorola senior management to join AMD."
That agreement with Ruiz is set to expire at the end of this year, according to a spokeswoman for Motorola who said the company "went to court to make sure nothing like this happens again."
Analysts said a hefty payment like the one received by Ruiz is being increasingly employed by technology companies as a tool to ensure departing managers don't leave with an entire department. Even then, contracts like the one signed by Ruiz are difficult to enforce, analysts said.
"The fine points will be decided by lawyers and that's the tricky part," said Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz. "A financial officer knows where all the bones are buried, and Motorola wants to make sure AMD can't take any more such employees."
AMD last week declined to comment on the specifics of the case. A spokesman said AMD will avoid anything that could jeopardize its relationship with Motorola.
"There are factual questions about the case that we are not going to comment on now," the spokesman said. "Ruiz hasn't commented, and we certainly aren't going to do anything that will jeopardize our relationship with Motorola."