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)
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(WEB HOST INDUSTRY REVIEW) — Shortly after resigning as chief executive officer of HP (www.hp.com), Mark V. Hurd accepted a post at IT software and hardware firm Oracle (www.oracle.com) as a co-president, director and board member. HP, however, quickly launched legal action against Hurd in an attempt to stop his hiring over fear that he will dispense critical information to its rival.
As is to be expected with a move this high-profile between two companies this large, much was said and written about Mark Hurd this week, starting with the civil complaint HP filed with the Santa Clara County Superior Court in an effort to keep Hurd from joining Oracle.
It must be noted that while he did not have a non-compete stipulation in his separation deal with HP, Hurd did agree to a confidentiality provision, and in its suit, HP states that Hurd’s new job puts him in a position where he will be forced to divulge crucial information:
“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.”
Oracle chief executive officer Larry Ellison took offense to the lawsuit, offering the following:
“By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace.”
In an interview with MarketWatch, national employment and labor practice chair at Palo Alto law firm Cooley LLP (www.cooley.com) Frederick Baron explains that HP’s case may be difficult in California, which has earned a reputation against enforcing non-compete clauses:
“It has been rejected in California court decisions and so it’s most likely that a court would look for some evidence of actual misuse or disclosure. In other words, they would look for some actual evidence of some misuse, such as copying computer database information or taking some confidential documents.”
The Oracle lawsuit is not the limit to Hurd’s legal problems stemming from his resignation at HP. Shareholders filed a derivative lawsuit related to the circumstances surrounding 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.
The following is from the complaint, filed in California Superior Court by the law firm Scott+Scott LLP (www.scottandscottllp.com) as excerpted in a ComputerWorld article:
“As a result of Hurd’s, Lesjak’s and the HP board’s shortcomings, HP lost significant credibility and the market punished HP (and its shareholders) … [by] slashing its stock ratings and erasing over $9 billion in market capitalization.”
Regardless of his inelegant departure from HP, Hurd legacy will remain relatively positive. In a post on The Register, the technology news site that prides itself on “Biting the hand that feeds IT,” Timothy Prickett Morgan expressed that:
“Over the past five years, Hurd can take credit for an improved PC business, a steady printer and consumables business, and a rationalized and growing server business where HP is now both the shipment and revenue leader. The expansive plan to turn HP into a real IT player might have been all Fiorina flair, but the execution – done with a magnifying glass, sharp pencil, and a pair of pliers – was pure Hurd.”
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