Medical technology rivals Medtronic Inc. and St. Jude Medical Inc. said late Tuesday that they have settled a bitter legal dispute that involved a former high-ranking St. Jude executive who went to work at Medtronic.

In a complaint filed in Ramsey County District Court in July, Little Canada-based St. Jude alleged that Joseph McCullough violated a noncompete agreement when he accepted a position at Medtronic.

On Tuesday, neither company would disclose the terms of the settlement. It's unclear whether McCullough is still employed by Fridley-based Medtronic.

McCullough, 60, had been St. Jude's group president responsible for worldwide sales and marketing of heart devices before accepting an executive position at Medtronic. St. Jude claimed that he had "unrestricted access" to confidential information regarding its growth plans and strategy and had signed an agreement not to jump to a competitor. Noncompete agreements are common in the high-stakes medical technology industry.

At St. Jude, McCullough reported directly to CEO Daniel Starks and was one of the company's top-paid executives. In 2009, as several of its core businesses slowed, Starks and McCullough agreed that he would step down, according to the complaint.

St. Jude agreed to keep McCullough on the payroll at an annual salary of $500,000 through December of this year, as he waited for stock options to vest. In return, the complaint states, McCullough agreed to honor his noncompete agreement.

But on May 10, McCullough allegedly notified St. Jude that he "no longer was an employee ... effective immediately" and exercised stock options worth $2.1 million. St. Jude said it believes McCullough was induced by Medtronic to "switch sides" with a signing bonus, guaranteed compensation and stock options.

In a ruling last month, District Court Judge M. Michael Monahan said McCullough couldn't work for Medtronic until November.

St. Jude had requested a temporary restraining order preventing McCullough from working at Medtronic until mid-May of 2011.

'Legal and ethical problems'

Monahan wrote in his ruling that documents in the case "are evidence that both [McCullough] and Medtronic recognized that they were embarking on a relationship that was laden with serious legal and ethical problems. Thankfully, I am not required to deal with the ethical."

Medtronic disputed the judge's conclusion "that it is legal for St. Jude to prohibit an employee, even a senior executive, from working for a competitor in a non-competitive capacity."

McCullough could not be reached for comment Tuesday.

Janet Moore • 612-673-7752