BellSouth: Forsee decision could go either way

Arbiter William Webster is scheduled to rule by the end of Tuesday on whether BellSouth Vice Chairman of Operations Gary Forsee can leave the carrier to become chief executive officer of Sprint. And while the RBOC remains hopeful that Webster--the former head of both the FBI and CIA--will uphold the non-compete agreement Forsee signed when he joined BellSouth, a spokesman today conceded the decision just as easily could go Forsee’s way.

“Nobody has any idea how this is going to go--it’s 50-50,” said BellSouth’s Jeff Battcher. “Our attorneys told us the arbitration went well, but Webster didn’t show his hand. I guess that’s why he was a good CIA guy.”

BellSouth is trying to block Forsee’s departure to Sprint--which competes with BellSouth in the long-distance market and with the carrier’s Cingular Wireless joint venture--because he allegedly has intimate knowledge of the RBOC’s trade secrets, including strategies designed to win back long-distance customers from Sprint.

Fulton County Superior Court Judge Stephanie Manis ruled last month that the non-compete agreements, which Forsee signed when he joined BellSouth in 1999 and again in 2001 when the agreement was updated, were “overly broad.” She consequently vacated that portion of the temporary restraining order secured by BellSouth to prevent Forsee’s departure.

However, Manis let stand the non-disclosure element of the order and instructed Forsee and BellSouth to submit that part of the dispute to arbitration. As a result, Forsee was prevented from joining Sprint for 30 days and from disclosing or destroying confidential information about BellSouth. Webster was appointed arbiter nine days after Manis’s ruling.

The case has several potential outcomes. Webster could allow Forsee to leave for Sprint immediately with no restrictions. Or he could prevent Forsee from going to Sprint for the 18-month duration of his contract with BellSouth. More likely is that Webster will allow Forsee to leave, but with certain restrictions. For instance, Forsee could be prevented from participating in merger-and-acquisition negotiations and forced to sign an affidavit each quarter stating that he has not divulged any of BellSouth’s sensitive or proprietary information.

Such restrictions could be difficult to enforce, but the Battcher said BellSouth would monitor the situation for some time. “If Sprint introduces a wireless pricing plan that only he would have known about, we’ll go after him for breach of contract,” he said.

Regardless of Webster’s decision, Forsee has worked his last day at BellSouth, said one source close to the situation. “If Webster rules for BellSouth, Forsee will be offered an exit package. He won’t be going back there.” Forsee has remained on BellSouth’s payroll through the dispute but essentially has been in exile since Manis’s ruling, according to sources.