Source: The Wrestling Observer Newsletter
Word is that the WWE waited on signing El Generico due to the lawsuit with TNA. While Generico was never signed to TNA, WWE opted to wait on making the offer because they discovered that he had previously wrestled two tryout matches for TNA. WWE wanted to be extra careful and stay away from a wrestler that TNA had looked at until the lawsuit was settled.
Generico is currently training at WWE developmental in Tampa and at this time it's expected that he will debut with a different gimmick.