HP sues to block Hurd from Oracle move
SAN FRANCISCO (Bloomberg) - Hewlett-Packard Co. sued former CEO Mark Hurd to block him from working as a president of Oracle Corp.
Serving as an Oracle president would make it "impossible" for Mr. Hurd to avoid using or disclosing HP's trade secrets and confidential information, according to HP's lawsuit, filed today in California superior court.
Oracle, the world's second-biggest software company, announced the hiring yesterday and said Mr. Hurd would serve as a board member, reporting to CEO Larry Ellison. He would bring expertise in using acquisitions to spur growth. At HP, Mr. Hurd more than tripled profit by cutting costs and expanding beyond the company's core business of computers and printers.
"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," HP said in the complaint.
Glenn Bunting, a spokesman for Mr. Hurd, declined to make an immediate comment. Oracle spokeswoman Deborah Hellinger did not respond to a request for comment.
HP, based in Palo Alto, California, fell 42 cents to $39.92 by 4 p.m. on the New York Stock Exchange. Oracle, based in Redwood City, California, rose $1.35 to $24.27 on the Nasdaq Stock Market.
Technology companies including HP, Apple Inc., Microsoft Corp., International Business Machines Corp. and Google Inc. have clashed over hiring in the past, with one side trying to bar managers privy to sensitive information from moving to a rival. Some lawsuits are settled out of court.
HP may struggle to prevent Mr. Hurd from working at Oracle before there's evidence he has disclosed or used HP's proprietary information, said Frederick Baron, chair of the employment and labour practice at Cooley Godward Kronish LLP. "HP will have an uphill climb," he said. "The inevitable use doctrine has been argued around the country, but it is not well established in California or in many jurisdictions," said Mr. Baron. "Oracle is assuming Mark Hurd can do his job based on his general know-how and talents," and by using Oracle's existing base of intellectual property, he said.
Mr. Hurd left HP August 6 after the company said he violated standards of business conduct. An investigation into a sexual harassment claim said inaccurate expenses, filed by him or in his name, covered up a personal relationship with a contractor.
As part of his severance, Mr. Hurd was due to receive a payment of $12.2 million, plus other benefits that include restricted HP shares. Hurd signed agreements with HP in February 2008, 2009, and 2010, and again on Aug. 6, that prevent him from disclosing confidential information, and from soliciting HP customers, employees, or suppliers for two years, HP's complaint says.
In his positions and through board, operation, technology, strategic planning and customer meetings, Mr. Hurd "was privy to the most sensitive of HP trade secret and confidential information", HP said. In its complaint, HP asked the court to order Mr. Hurd to provide the company with more information about his new job "pursuant to his trade secret protection agreements with HP".
Because of Mr. Hurd's plans to go to Oracle, "HP is threatened with losing customers, technology, its competitive advantage, its trade secrets and goodwill in amounts which may be impossible to determine," says the complaint, which accuses him of breach of contract and does not name Oracle as a defendant.