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HP Sues Mark Hurd For Taking Job at Oracle

By - Source: Tom's Hardware US | B 27 comments

That was fast.

Oracle yesterday announced that it would be hiring former HP CEO Mark Hurd to fill the position of co-president. However, it seems HP is unhappy that its recently departed chief executive has found a new home so quickly, and the company is suing Hurd for breach of contract.

HP's lawsuit claims Mark Hurd was paid millions of dollars in cash, stock and stock options in exchange for protecting HP's trade secrets. The company said in a statement that the suit, filed yesterday in Santa Clara County, California, is just an effort to enforce the agreements entered into by Mark Hurd. Further, HP believes that Hurd's presence at Oracle violates confidentiality agreements that Hurd signed on three different occasions.

"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."

HP didn't have Hurd sign a non-compete agreement because they're invalid in the State of California (except for equity stakeholders). However, as HP has proved, that doesn't mean the company can't file a civil suit against a former employee if trade secrets are at stake. We'll keep you posted on how this plays out.

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Top Comments
  • 21 Hide
    hellwig , September 8, 2010 7:52 PM
    Non-compete clauses are invalid in California? I hadn't heard of this. Guess that's why so many tech companies move out there despite the ridiculous tax laws.

    I don't like non-compete clauses for most people, but I have to admit that a President, Chairman, AND CEO like Hurd would be privy to vast amounts of information regarding every sector of HPs business. Oracle owns Sun, they are in direct competition to HPs server business. Therefore, when Oracle goes to Hurd and says "where is the next big market we should invest in?", he will naturally refer to anything he learned at HP (what else would he know?).

    It would be like an American president leaving office, then taking up a leadership role in Pakistan or North Korea. There is a definite conflict of interest here.
  • 12 Hide
    jerreece , September 8, 2010 7:57 PM
    The legal folks at Oracle had to know about this before they let Hurd be hired.
Other Comments
  • -6 Hide
    Agges , September 8, 2010 7:50 PM
    These CEOs win the lottery for a living, with that kind of money coming in I wonder what you have to do to get there..

    *hope to be back in 20 years time to you know*
  • Display all 27 comments.
  • 21 Hide
    hellwig , September 8, 2010 7:52 PM
    Non-compete clauses are invalid in California? I hadn't heard of this. Guess that's why so many tech companies move out there despite the ridiculous tax laws.

    I don't like non-compete clauses for most people, but I have to admit that a President, Chairman, AND CEO like Hurd would be privy to vast amounts of information regarding every sector of HPs business. Oracle owns Sun, they are in direct competition to HPs server business. Therefore, when Oracle goes to Hurd and says "where is the next big market we should invest in?", he will naturally refer to anything he learned at HP (what else would he know?).

    It would be like an American president leaving office, then taking up a leadership role in Pakistan or North Korea. There is a definite conflict of interest here.
  • 6 Hide
    jomofro39 , September 8, 2010 7:52 PM
    This is one lawsuit as of late that I can agree with. Hurd the terd HAD to have seen this one coming. Three NDAs, while not non-compete agreements, still should have this one in the bag. The Oracle didn't see this one coming?
  • 12 Hide
    jerreece , September 8, 2010 7:57 PM
    The legal folks at Oracle had to know about this before they let Hurd be hired.
  • 7 Hide
    restatement3dofted , September 8, 2010 8:02 PM
    If non-compete agreements are invalid under CA law, it seems plausible that the court in this case could rule that NDAs like the ones at issue here, which are so rigidly construed as to prevent someone like Hurd from ever obtaining employment in a similar capacity with a company in the same industry, amount to a non-compete agreement. If the end result is that Hurd has to leave the industry to avoid violating them, a court might have a hard time ruling that they should be enforced - assuming, of course, that Hurd/Oracle aren't capable of defending against HP's allegations in the first case, which is unlikely.

    I'll be interested to see where this one goes. If it stands up, Hurd will find himself virtually unemployable, at least in any capacity similar to his position at HP.
  • -6 Hide
    HavoCnMe , September 8, 2010 8:08 PM
    HP......HatingPlayer's
  • -1 Hide
    kinggraves , September 8, 2010 8:34 PM
    Restatement3dofTedIf non-compete agreements are invalid under CA law, it seems plausible that the court in this case could rule that NDAs like the ones at issue here, which are so rigidly construed as to prevent someone like Hurd from ever obtaining employment in a similar capacity with a company in the same industry, amount to a non-compete agreement. If the end result is that Hurd has to leave the industry to avoid violating them, a court might have a hard time ruling that they should be enforced - assuming, of course, that Hurd/Oracle aren't capable of defending against HP's allegations in the first case, which is unlikely.I'll be interested to see where this one goes. If it stands up, Hurd will find himself virtually unemployable, at least in any capacity similar to his position at HP.


    He doesn't need employment, he's got enough for a dozen people to retire on just from his hush money. He accepted the NDAs and has to live with the consequences.
  • -8 Hide
    belardo , September 8, 2010 8:37 PM
    hellwigIt would be like an American president leaving office, then taking up a leadership role in Pakistan or North Korea. There is a definite conflict of interest here.


    Yeah, that would be like FOX "News" being owned primarily by an Australian and a Saudi Arabian, and somehow getting around FCC rules about non-American Owned News network. Oh yeah, that did happen.

    Overall, HP's suit is useless. They fired him over petty crap, that most people in the business do, especially those of big companies. $50~100 here or there for a dinner is like dropping a penny. He didn't leave and THEN go work for Oracle.

    Hey, he helped HP turn around, make a profit, etc... and they fired him. Oooo poor baby HP. Sucks to be them. They can go jump in a lake along with their crappy computers and money sucking printers.
  • 3 Hide
    jellico , September 8, 2010 8:42 PM
    AggesThese CEOs win the lottery for a living, with that kind of money coming in I wonder what you have to do to get there..*hope to be back in 20 years time to you know*

    Statements like this are patently absurd. You might as well claim that General Schwarzkopf, or General McChrystal, or General Petraeus won "life's lottery."

    A CEO is a perfect storm of ambition, energy, creativity, education, vision, and social networking. If you have most, but not all of those things, you can probably still be successful and end up in management at anywhere from low-level manager to senior VP. Most people only see the perks of the job of being a corporate CEO: the limos, the private jets, the exclusive clubs, and of course, the generous compensation packages. What they don't see are the frequent 80 - 90 hour work weeks, the constantly being on call, the responsibilty for thousands or even tens of thousands of employees (and by proxy, their families), the pressure of being expected to perform and make money CONSISTENTLY for the shareholders. The simple fact is that most people would be unable or unwilling to put in that kind of effort.

    Here's a simple test: if you think you've got what it takes to be a CEO, then quite your job and start your own business. It's pretty easy to draw a paycheck without having to worry about actually making enough money to justify your employment. Once you get into the middle six-figure salaries and above, you are there ONLY because you make a lot more money than that for someone else.
  • 4 Hide
    hellwig , September 8, 2010 8:44 PM
    belardoYeah, that would be like FOX "News" being owned primarily by an Australian and a Saudi Arabian, and somehow getting around FCC rules about non-American Owned News network.

    According to Wikipedia, Murdock became a U.S. citizen when he bought Fox, so I'm not really sure what your point is. Besides, I don't think Murdock was/is privy to any state secrets in Australia, Britain, or the U.S.
  • 9 Hide
    edilee , September 8, 2010 9:03 PM
    HP has trade secrets? How secret can manafacturing junk be?
  • 4 Hide
    restatement3dofted , September 8, 2010 9:04 PM
    kinggravesHe doesn't need employment, he's got enough for a dozen people to retire on just from his hush money. He accepted the NDAs and has to live with the consequences.


    Damn, calm down, dude. I'm not expressing an opinion about Hurd, HP, or Oracle one way or another. I'm just saying that if NDAs are so restrictive that they prevent any sort of lateral movement between companies, it seems like you could argue that they amount to a non-compete agreement in disguise, which might not make a California court too happy.

    Relax.
  • -1 Hide
    Anonymous , September 8, 2010 9:06 PM
    With Hurd the turd at the helm, I dread the downward spiral that currently great products like OpenOffice will take. HP used to be good, now it's crap. Oracle's recent acquisition of Sun and thus OpenOffice was worrying enough to me on it's own. Now with this idiot near the top it could be disastrous.
    It's been proven that the personality traits of a good manager/CEO are similar to and frequently mistaken for the personality traits of a psychopath. In this case, I think he's the latter.
  • 1 Hide
    Stifle , September 8, 2010 9:12 PM
    Saw this one coming.
    I still don't know what he could have that Oracle would want. I guess Oracle is interested in an unpopular tech CEO that left his former company because of a sexual harassment investigation. . .

    "Mark did a brilliant job at HP and I expect he'll do even better at Oracle"
    -Oracle CEO, Larry Ellison

    something is missing here
  • -2 Hide
    N.Broekhuijsen , September 8, 2010 9:32 PM
    wow finally a lawsuit that makes some sence. Not saying im for the sewing, but there is some relevant reason behind this, instead of the usual "Im sueing you because you waved at me and it made me run over my baby" kind of thing.... if you know what im getting at.
  • 1 Hide
    azgard , September 8, 2010 10:17 PM
    Restatement3dofTedIf non-compete agreements are invalid under CA law, it seems plausible that the court in this case could rule that NDAs like the ones at issue here, which are so rigidly construed as to prevent someone like Hurd from ever obtaining employment in a similar capacity with a company in the same industry, amount to a non-compete agreement. If the end result is that Hurd has to leave the industry to avoid violating them, a court might have a hard time ruling that they should be enforced - assuming, of course, that Hurd/Oracle aren't capable of defending against HP's allegations in the first case, which is unlikely.I'll be interested to see where this one goes. If it stands up, Hurd will find himself virtually unemployable, at least in any capacity similar to his position at HP.


    It will stand up, regardless of how you feel about NDA. As stated his severance package received upon his leaving the company was based upon his NDA which effectively means he is in the position to forfeit all of this, which is what he is being sued for. Now, if Oracle steps up to the plate and offers compensation to cover his losses....you can see where this can go ;) .
  • 0 Hide
    adikos , September 9, 2010 12:04 AM
    i hope they take all his money they gave him. people can go on and on saying people earned this money through long hours and responsibilities and while some of that goes into a salary, these people make gigantic stacks of cash already, dont count bonuses or adjusted figures. most CEOs make more than a large percentage of their own workers COMBINED.

    that said, im shocked that hurd nor oracle considered the ramifications of him leaving. i know when i quit this awesome tech support job on friday ill have to sign a forms similar to what he signed saying pretty much the same thing. its a no brainer.
  • 0 Hide
    Onus , September 9, 2010 12:35 AM
    Restatement3dofTedIf non-compete agreements are invalid under CA law, it seems plausible that the court in this case could rule that NDAs like the ones at issue here, which are so rigidly construed as to prevent someone like Hurd from ever obtaining employment in a similar capacity with a company in the same industry, amount to a non-compete agreement. If the end result is that Hurd has to leave the industry to avoid violating them, a court might have a hard time ruling that they should be enforced - assuming, of course, that Hurd/Oracle aren't capable of defending against HP's allegations in the first case, which is unlikely...

    Although I think this viewpoint has a lot of merit, on the other hand, Hurd was guilty of dishonest acts. If he ends up losing, and being stripped to penury, I'll probably just smile and nod. And for Oracle to hire a dishonest guy for a senior position? Oh HELL no. If I owned Oracle stock, I'd sell it.
  • -1 Hide
    LORD_ORION , September 9, 2010 2:12 AM
    As far as I am concerned, if a company lets you go, the contract should be void as well. It's your own damn fault for letting someone go with that kind of knowledge.
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