Edit: I heard this story in the 80s when I was a kid. It may be real or not, but the point is the same. I'm still looking for the FWD: FWD: FWD: but I've never heard it again since the mid 80s.
No it didn't; the Baby Bells were created by the 1984 breakup of AT&T.
EDIT: As a sibling post provides details, the error was calling it a "Baby Bell"; the essence of the story, at least the lawsuit itself, is true, but Southern Bell was a pre-breakup Bell Operating Company (an AT&T subsidiary), not a post-breakup Baby Bell. [Errors like pointing to a Baby Bell 20ish years before they existed are often, but as this incident shows not always, signs of folk mythology.]
Also, you may hire based on talent, but still at a discount. Just because you can, and it is profit maximizing!
Personally, I'd rather keep the profits of my extra productivity for myself.