HP Sues Mark Hurd After Hurd Joins Oracle

Hewlett-Packard filed a lawsuit against former CEO Mark Hurd today. Yesterday, Hurd agreed to join Oracle as co-president. HP claims Hurd is violating his confidentiality agreement and will reveal the HP’s trade secrets to competitor Oracle. The agreement was part of Hurd’s severance package.

Here’s an excerpt from the lawsuit’s introduction, from HP’s blog:

“Despite being paid millions of dollars in cash, stock and stock options in exchange for Hurd’s agreements to protect HP’s trade secrets and confidential information during his employment and following his departure from his positions at HP as Chairman of the Board, Chief Executive Officer, and President, HP is informed and believes and thereon alleges that Hurd has put HP’s most valuable trade secrets and confidential information in peril. Hurd accepted positions with Oracle Corporation (“Oracle”), a competitor of HP, yesterday as its President and as a member of its Board of Directors. In his new positions, Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing HP’s trade secrets and confidential information to others.”

According to the New York Times:

(When Hurd was fired,) H.P. found no evidence of sexual harassment, but said Mr. Hurd had tried to conceal a personal relationship with (female contractor) Ms. Fisher by removing her name from his expenses for meals. Mr. Hurd settled with Ms. Fisher for an undisclosed sum and fought H.P.’s decision to make the sexual harassment claims public.

Oracle’s chief executive and largest shareholder, Lawrence J. Ellison, a personal friend of Mr. Hurd’s, had criticized H.P.’s board last month in an e-mail message, calling the dismissal “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”

Ellison, meanwhile, has a new samurai for his cutthroat Oracle team, according to MarketWatch:

Steve Allen of Sierra Tech Research cited Ellison’s move as a strategic masterstroke, saying “he has just recruited a general from the enemy. Who knows the enemy better than Hurd? The drums are beating. There is talk of war.”

When it comes to waging war in the corporate tech arena, Oracle is known to be relentless. Oracle’s co-president, Safra Catz, testified about an internal program code-named “Kill SAP,” referring to the German software player. “It’s a little military, but our guys get excited,” she said.

While the executive he just hired to be co-president got sacked in an embarrassing scandal, Ellison himself has survived similar tough spots — including a very public dispute involving sex. This happened in the 1997 trial of Adelyn Lee, Ellison’s ex-girlfriend and a former Oracle secretary, who had accused him of illegally firing her and won her a settlement. However, Lee was later convicted of perjury for faking an email she used in her complaint.

Hurd and Ellison are peas in a pod. But if HP can’t stop Hurd from spilling trade secrets, the company could try to get him where it Hurds, so to speak. According to one analyst (via SFGate):

Mr. Hurd’s former employer would argue, “We already have paid you for the confidentiality agreement and we assume you are going to violate that,” the pay consultant said. H-P also “could sue him for a lot more than they paid him” for leaving, Mr. Reilly said.

This lawsuit comes after a shareholder sued the HP board for firing Hurd–err, letting him resign. Maybe this isn’t about HP draining Hurd of his golden parachute, but about HP proving that it’s taking action after ticking off shareholders by firing its superstar CEO. If HP lawyers don’t have tangible proof of Hurd’s spilling secrets, how can they have anything but a long, drawn-out case?

Politics as usual, in other words.

  • Henry

    HP couldn’t trust Mark with $10,000, I am surprised Larry Ellison is willing to trust Mark with billions of dollars.