Ford has been ordered by a US court to allow the former head of its European operations to work for a rival. The ruling found the testimony of one of the car maker's senior executives to be "internally inconsistent".
A Michigan judge granted a preliminary injunction against Ford, forcing it to abandon attempts to enforce a non-competition agreement against Martin Leach, former president and chief operating officer of the European arm.
The judge found that he had not resigned, despite the world's second-largest car maker issuing a press release this summer, saying he had quit.
The ruling is embarrassing for Ford, as it attacks the credibility of David Thursfield, president of international operations.
It could also be costly, as the judge concluded that Mr Leach had "a strong likelihood of success" in the planned full court hearing.
Mr Leach is asking for a permanent injunction on Ford and for damages of up to €60 million (about $75 million) for preventing him taking a highly-paid job running the car arm of Italy's Fiat.
Fiat's job offer was withdrawn because of Ford's insistence on enforcing the non-competition agreement. "Leach will suffer irreparable harm if an injunction is not issued," the judge said.
"Ford's public pronouncement that it would seek legal action against Leach and any competitor that tried to hire him has effectively rendered Leach unemployable in the automotive industry."
Mr Thursfield had claimed in his court testimony that Mr Leach resigned at a meeting in August, something he denied.
Under a non-competition clause signed by all senior Ford executives, Mr Leach agreed not to work for a competitor for two years if he resigned. However, this clause did not apply if he was fired.
"The court does not find credible Thursfield's testimony in his deposition that Leach stated at the August 7th meeting that he was resigning from his position at Ford Europe," the judge said. Ford said it was reviewing the decision. - Financial Times Service