HP: Mark Hurd is violating our trade secrets as part of Oracle

HP: Mark Hurd is violating our trade secrets as part of Oracle

Summary: A day after becoming Oracle's co-president, Mark Hurd is facing a lawsuit from Hewlett-Packard over trade secrets and confidentiality agreements.

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Updated: A day after becoming Oracle's co-president, Mark Hurd is facing a lawsuit from Hewlett-Packard over trade secrets and confidentiality agreements.

The lawsuit was filed in Santa Clara County in California. Non-compete clauses generally don't hold up in California. However, HP is alleging that Hurd has trade secrets and can hurt the company's business. Hurd resigned from HP last month following a sexual harassment probe. Oracle CEO Larry Ellison defended Hurd and then quickly hired him.

In a blog post, HP said:

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 HP's complaint, the company is seeking an injunction "to protect its trade secrets and confidential information." HP is arguing that there's no way that Hurd will be able to meet his confidentiality responsibilities as part of Oracle. Hurd walked away with a severance payment of more than $12 million as well as stock. The total package could be worth more than $30 million at HP's current stock price. Here's a look at the key excerpt:

Among HP's primary beefs with Hurd's move to Oracle:

  • Hurd has information about HP's employees and how they are ranked.
  • Has knowledge of HP's proprietary designs and supplier relationships.
  • Is under a bevy of non-disclosure agreements.
  • Can't solicit HP employees, customers and suppliers.
  • And knows all about HP's future plans and roadmaps.

In other words, HP also jabs at Hurd's omission of his old company when talking about Oracle's Exadata machine.

In Hurd's separation agreement, filed with the Securities and Exchange Commission, the key item appears to be this clause.

"Continuing Obligations.    You acknowledge and affirm your continuing obligations under the HP Agreement Regarding Confidential Information and Proprietary Developments you signed on February 6, 2008, February 26, 2009 and February 12, 2010, (the "Confidentiality Agreements"); provided, however, that you hereby agree that Section 7 of the Confidentiality Agreement (Protective Covenants) shall apply for the period of twenty-four (24) months commencing on the Separation Date and; provided, further, that you agree that Section 2 of the Confidentiality Agreement (Confidential Information) shall apply at all times following the Separation Date".

Oracle had to see this lawsuit coming and assumed Hurd wouldn't be hit by any injunction HP may bring.

HP is seeking damages, an injunction and attorney fees.

Oracle has responded to the HP lawsuit against Hurd. Here's what Oracle said:

“Oracle has long viewed HP as an important partner,” said Oracle CEO Larry Ellison. “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."

More coverage:

Here's the complaint:

Court Filing: HP Civil Complaint Against Mark Hurd

Topics: Legal, CXO, Hewlett-Packard, IT Employment

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59 comments
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  • Where else is a washed up has-been going to work? :)

    After all, C level jobs aren't all that common, and a place like Oracle is the dead-end for what washes up on the beach...

    As for HP, maybe he should counter sue for wanton endangerment and enslavement. At least it would be more diverting than Oracle's other products! (chuckle)
    wolf_z
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @wolf_z You don't sound jealous at all.
      LP212
  • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

    HP is crying like a baby. Their board made a horrible decision when they cut him loose. So what's Mark Hurd supposed to do now? Put his brain in a jar and not use his experience or knowledge for his new employer?
    JenniferWeb
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @JenniferWeb
      Duh........yes???
      Why do you think they gave him 11 million when he left!! Screw this jerk, I think he should have to live on an island for 2 years with no human contact. He has plenty of money, just take a year off and/or do some good "honest" work for once in his life.
      SteelTrepid
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @SteelTrepid

        Duh..... NO! Damned well no! The fact is that JenniferWeb is right, these idiots are basically expecting this man to put his brain into a jar and not use it for his new employer, and that is NOT right.

        In fact, I'll be blunt: I am for making a PUBLIC COMPANY having any 'trade secrets' illegal, because it stifles innovation.
        Lerianis10
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @JenniferWeb he shuld of thought of that when he signed a confidentiality agreement. Not to mention when he cashed the severence package check.
      Al_nyc
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @Al_nyc So you're saying that HP has always been a bunch of good kids who played by the rules?
        As much as anyone says "screw him" it just doesn't work that way in the real world. He's not going to just give up and live on the money hes made in the past. That would mean a big change in lifestyle- things like bills to pay for mansions, mistresses to pay off and keep happy, wife to keep occupied, that sort of thing.
        To carry the metaphor a little further, HP just yelled "NO FAIR" and went to tell the teacher on him.
        www.dfwsupergeek.com
        unclefixer@...
    • Yes, self enriching dilettantes need to keep busy too

      [i]So what's Mark Hurd supposed to do now? Put his brain in a jar and not use his experience or knowledge for his new employer? [/i]

      If he can manage to pull his brain from his pants for a spell, he could jump aboard his sailing yacht with a high priced call girl - or some new bimbo mistress since his wife is obviously yesterday's news - and proceed to burn away the countless millions he pilfered from the hard work of others who make up the rank and file at HP.

      It'd be a real shame to waste all of that experience and knowledge he possesses in the field of self enrichment -- and leading by [i]non-example.[/i] Don't let it end there Mark, the peons are counting on you!
      klumper
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @klumper,
        Great post. Not only do you owe me a new keyboard, ;) your comment is 100% on target for the HP Board's pattern of creating SCANDALOUS compensation packages for ex-CEO's.
        Rick S._z
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @JenniferWeb
      Right said. It was a worst decision to oust him and now crying foul ! poor guys at HP
      reacharavindh
    • yes?

      @JenniferWeb

      Why did he sign the contract if he didn't want to abide by it? If anything, i think he should give back the hush money if he isn't going to abide by the agreement. If i'm held to stupid EULAs, why doesn't the same apply to him when he gets $18M?
      zdnet-registraion
    • Um, what are you talking about?

      @JenniferWeb <br>I'm not sure what planet you live on, but on the one called "Earth" we have these things called legally binding documents. And when a person signs one of these things, they legally promise to abide by whatever they just signed their name to. Now, if they DON'T want to abide by the conditions of the agreement, they don't sign. And if they do sign and change their mind, hard luck.<br><br>I'm no fan of HP, nor of their treatment of Mr Hurd. However, Mr Hurd legally bound himself in a standard "restraint of trade" agreement (which all the rest of us have to live by if we sign them), so therefore HP has every right to clobber him. And in fact, they should: Mr Hurd is legally in breach of a very important document whose negation has serious ethical and financial ramifications.

      Just because Mr Hurd was crapped on by HP does not give him some bleeding-heart-liberal reason to nullify his legal obligations. Are you a bleeding-heart-liberal, 'JenniferWeb', or do you believe that we are all equal before the law and should be held accountable for the legal promises we make? Feelings have no place in this discussion, just the facts... ma'am. <img border="0" src="http://www.cnet.com/i/mb/emoticons/wink.gif" alt="wink">
      naibeeru
  • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

    How can HP take legal action against something that hasn't happened, yet?
    jbuck011@...
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @jbuck011@... they are trying to cut him off in advance. They have a good point that he has knowledge of HP that will influence the decisions he makes at Oracle.
      Al_nyc
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @Al_nyc That's what they call tough s***... that sexual harassment thing that led to him being "released" from HP was a little shaky anyway- HP should have thought of that and thought things through a little better in the beginning.
        unclefixer@...
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @Al_nyc those board members that followed this trivial sacking through after the initial charges of sexual harrassment were found to be untenable knew that they had "tipped their hand" and revealed to Hurd the identity of his enemies within HP.<br><br>As such, they knew that if he survived the coup and retained power they were "dead men walking". Hence the trivial-seeming nature of the expenses "rap" that he was nailed with.<br><br>Payout or no, this war is going to continue, and I don't see any fairy-tale "Steve Jobs rejoins a resurgent Apple" ending to this sorry saga.
        AirmanChairman
  • Non-compete clauses are legally un-enforceable.

    Seriously, what is Hurd supposed to do ... become a carpenter? He has skills and he needs to work in his area of expertise, so he took a job offer from Oracle.

    HPaq is guilty of unfair restraint by suing to stop Hurd from being able to make a living. I hope they get hit for treble-damages of court costs and legal fees for wasting the court's time with their junk lawsuit.

    Regards,
    Jon
    JonathonDoe
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @JonathonDoe he took the severence package, so he would have to be ridiculously stupid to think this was not going to happen. With $12million in his bank account he can afford to take a couple of years off.
      Al_nyc
    • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

      @JonathonDoe

      Surely you have NO CLUE who Mark Hurd was?.

      Mark Hurd made one of the most innovative companies into one of the most hated companies by its employees a feat he achieved in mere 5 years time.

      Surely he would do well as a Carpentor for a change.........But I am not sure if he will do a good job at that too.
      bhasinusc@...
      • RE: HP: Mark Hurd is violating our trade secrets as part of Oracle

        @bhasinusc@...
        To be fair. It started before him with Carly fiorina
        Turd Furgeson