Former HP chairman, CEO and president Mark Hurd helped lead the company’s server business to lead the industry in both shipment and revenue. He resigned from HP last month following an investigation into alleged indiscretions. (photo by JD Lasica)
(WEB HOST INDUSTRY REVIEW) — Shortly after leaving his post as chief executive officer of HP (www.hp.com), Mark V. Hurd joined IT software and hardware firm Oracle (www.oracle.com) as a co-president, director and board member. Over fear that he will dispense critical information to its rival, however, HP has launched legal action against Hurd.
HP filed a civil complaint with the Santa Clara County Superior Court in an effort to keep Hurd from joining Oracle and dispensing with critical information to its rival. While he did not have a non-compete stipulation in his separation deal with HP, Hurd did agree to a confidentiality provision, which could be compromised at his new post.
The filing noted as follows: “Hurd has put HP’s most valuable trade secrets and confidential information in peril… 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.”
An article from The Recorder explains that employment law experts believe that HP’s case may be difficult in California, which Cooley litigation partner Frederick Baron said “has a strong public policy against enforcing noncompete clauses.”
Nevertheless, HP appears to be relying on the doctrine of inevitable disclosure – which assumes that Hurd will eventually disclose his former company’s trade secrets by taking a job at a competitor. Without some sort of “smoking-gun” evidence, however, another expert notes it may be unlikely that the court will grant an injunction to stop Hurd from working at Oracle.
In August, Hurd resigned his position as HP chairman, CEO and president following an investigation into a sexual harassment claim against Hurd by HP marketing consultant Jodie Fisher. While the investigation determined that Hurd had not violated HP’s sexual harassment policy, he was found to have violated HP’s Standards of Business Conduct by falsifying expense reports and breaking the trust of the board by attempting to keep his relationship with Fisher from them.
The Oracle lawsuit is not the limit to Hurd’s legal problems stemming from his resignation at HP. Shareholders have filed a derivative lawsuit following the imbroglio over Hurd’s departure, claiming, among other things, that HP lost “significant credibility” due to the controversy and a loss of $9 billion in market capitalization following Hurd’s resignation.
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