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HP sues Hurd for Oracle job

HP sues Hurd for Oracle job

HP has decided that Mark Hurd can't take his know-how to rival Oracle - and will sue to prevent it.

Despite HP having received former chief executive Mark Hurd's resignation over claims of financial impropriety and possible sexual harassment, it seems that the company isn't done with him yet: HP is now suing Mark Hurd for having found another job.

According to Business Insider, Hurd has declined to quietly retire and has instead found another job at long-time HP rival Oracle as co-president and member of the board of directors. HP isn't exactly happy - and is proceeding a civil complaint which alleges that the ex-CEO has violated the severance agreement that saw HP give Hurd a golden parachute in the millions of dollars.

The suit claims that "by working at Oracle, [Hurd] cannot help but utilise and disclose HP's trade secrets and confidential information." In a further announcement, HP claims that "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements."

The company has posted a full copy of the filing on document sharing site Scribd, and it's interesting to see the angle being taken: rather than the risky approach of arguing a "no-compete" clause, which would represent an undertaking not to work for a direct competitor for a number of years after leaving the company and is rarely enforceable in law, HP is claiming potential violation of trade secrets.

Although Oracle's stock rose by 5 per cent on the news of Hurd's hiring, the alleged philanderer and plunderer could prove to be something of a poison pill should the lawsuit decide in HP's favour.

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20 Comments

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scawp 8th September 2010, 10:20 Quote
busted!
eddtox 8th September 2010, 10:59 Quote
So the guy can't get another job?
What is it with companies wanting to own your soul?
Flibblebot 8th September 2010, 11:09 Quote
I was always under the impression that clauses like this were essentially non-enforceable since they basically infringed your human rights by restricting your ability to get a job.

It'll be interesting to see whether this goes, but it may just be HP posturing. I'd never have really considered HP and Oracle to be major rivals - not in the same was as Oracle & SAP or Oracle & MS.
mclean007 8th September 2010, 11:19 Quote
eddtox - he could have refused the severance package and stuck with the terms of his contract, which might have allowed HP to put him on gardening leave for a period of (say) 3-6 months on full pay, or maybe prevented him from going to a competitor within that period. Instead I understand he accepted a "golden parachute" cash payment (not a bad deal if you can get it - a few million dollars to leave a job in which you've (*allegedly*) been fiddling your expenses), and his part of that deal evidently included a more stringent non-compete clause, which HP is now seeking to enforce.

I'm with HP on this. They're not trying to stop him from working, just to stop him from working for a competitior for a reasonable period, which would be in breach of the terms of his severance deal. In the UK at least a perpetual non-compete would not be enforceable, but one limited for a reasonable time (say up to 12 months) would be. The law has to protect employers against employees walking out the door and taking trade secrets to competitors. It's not about "owning your soul". If Hurd wanted to take a job flipping burgers, I'm sure HP would have no problem with that as it's unlikely that his insider knowledge of HP would benefit Joe's Burger Shack to the detriment of HP. Although technically he may be precluded from working for anyone for a certain period, I doubt they'd enforce it.
mclean007 8th September 2010, 12:16 Quote
Quote:
Originally Posted by Flibblebot
I was always under the impression that clauses like this were essentially non-enforceable since they basically infringed your human rights by restricting your ability to get a job.
In the UK at least (can't speak for the US) non-compete provisions must not go further than what is reasonably required to protect the former employer from harm. Hence they can't be perpetual; they should be limited to preventing the employee from going to a new employer in the same field, etc.

Not to mention if Hurd is on gardening leave then he still HAS a job, it's just that his job consists of sitting in his house counting the huge wad of cash HP just to stay at home.
TheUn4seen 8th September 2010, 14:18 Quote
While I'm not a big fan of HP (or Oracle for that matter), I agree with them. Mr. Hurd agreed to the provisions and HP paid him milions for that. I see that as a case of another disgruntled employee - but instead slashing tires he moved to competition in a childish attempt to "get back at them". Or he is just greedy.
perplekks45 8th September 2010, 15:15 Quote
Dating someone working in HR I KNOW that clauses like this one are illegal in almost all industrialized countries and therefore non-enforceable. It'll be fun to see HP being ripped apart in front of a judge. ;)

I signed a contract like that myself that says I am absolutely and completely NOT allowed to join any other company in the online betting/gaming sector for 6 months after I quit or get fired. I just signed it because I know that they won't be able to enforce it and if they try I'll just say "sure, let's go to court... you're gonna pay in the end anyway"
dyzophoria 8th September 2010, 16:56 Quote
im just wondering what trade secrets could Hurd give Oracle that will come from HP. lol, dunno, I cant think of any secrets HP has that Oracle would like lol
Flibblebot 8th September 2010, 17:31 Quote
Quote:
Originally Posted by mclean007
In the UK at least (can't speak for the US) non-compete provisions must not go further than what is reasonably required to protect the former employer from harm. Hence they can't be perpetual; they should be limited to preventing the employee from going to a new employer in the same field, etc.
Having worked with HR teams, I was told by our legal team that even that much was unenforceable - if someone has worked in the same industry their whole lives, and that's all they know, such a clause would infringe on the (ex-)employee's human rights to get a job in the only field they know. We were told that we could include such a clause in employment contracts, but they would be there purely to scare people - we wouldn't actually be able to enforce them.

The only caveat, I guess, was if there was demonstrable proof that the employee was using his knowledge to give a competitor an unfair advantage, and I'm not entirely sure whether Hurd would be able to steer Oracle's direction given that hardware sales (I'm thinking the only overlap between the two companies is servers?) are such a small proportion of Oracle's revenue. I may be wrong, though.
Quote:
Originally Posted by mclean007
Not to mention if Hurd is on gardening leave then he still HAS a job, it's just that his job consists of sitting in his house counting the huge wad of cash HP just to stay at home.
If that were the case, HP would be suing for breach of his employment terms, not for disclosure of privileged information.
perplekks45 9th September 2010, 08:08 Quote
As far as I understood it Hurd left HP effective practically immediately with a payout of $12.2m in cash plus shares & stuff worth another almost $35m.

HP is getting sued for that package, by the way. ;)
BRAWL 9th September 2010, 12:38 Quote
Fair enough, I have the same thing with the company I work for. I can't work for a competator for like... six months if I left i think it is for fear of death by internet.

He knows stuff about HP that he's going to go "Oh yeah they're working on project x,y,z" off the record of course. So I would happily watch HP sue this dude into the ground. if I signed a tenancy agreement and refused to pay the rent then got a bailiff knocking at my door for unpaid rent. I wouldn't have a leg to stand on. Same applies here. HP please sue this idiot into the floor for me.
Cthippo 9th September 2010, 15:27 Quote
Quote:
Originally Posted by perplekks45
HP is getting sued for that package, by the way. ;)

This may be the key to the whole thing. One wonders if it's not a case of "Quick! Do something!"
sui_winbolo 9th September 2010, 15:40 Quote
Quote:
Originally Posted by eddtox
So the guy can't get another job?
What is it with companies wanting to own your soul?

He was the CEO, and HP gave him millions of dollars to retire, and he signed an agreement not to disclose any trade secrets of HP.

There isn't any reason why the man needs to work another day in his life. He's a dumb*** for trying to work for the competition and not expect anything to happen.
eddtox 9th September 2010, 15:55 Quote
Hmm... I do see why HP (or any other company) would want to do this - I'm just not sure it is (or should be) enforceable.

Unless they can actually prove that he was disclosing trade secrets I don't see how they have a leg to stand on. If someone is really that valuable to the company just don't fire them.

One of the reasons experience is so sought after by employers is the assumption that people will have acquired skills and knowledge in their previous employment which they can use for the good of their new employer.

What people do once they have left an employer is not that employer's business. They might not like it, but they can't really do much about it.
Redsnake77 9th September 2010, 16:41 Quote
I can't understand why Oracle would want HPs toxic waste, apart from to know what HPs long term plans are. Oracle are still going to be stuck with having to dispose of said toxic waste once it's passed on anything useful. And for a 5% rise in their stock value upon purchase of that toxic waste as co-President no less goes to show what a truly wretched place our world has become.
sui_winbolo 9th September 2010, 16:44 Quote
Quote:
Originally Posted by eddtox
Hmm... I do see why HP (or any other company) would want to do this - I'm just not sure it is (or should be) enforceable.

Unless they can actually prove that he was disclosing trade secrets I don't see how they have a leg to stand on. If someone is really that valuable to the company just don't fire them.

One of the reasons experience is so sought after by employers is the assumption that people will have acquired skills and knowledge in their previous employment which they can use for the good of their new employer.

What people do once they have left an employer is not that employer's business. They might not like it, but they can't really do much about it.

There's this however-
Quote:
the ex-CEO has violated the severance agreement that saw HP give Hurd a golden parachute in the millions of dollars.

He's violating an agreement he signed, which I imagine is good grounds for HP to sue.
perplekks45 9th September 2010, 17:05 Quote
Quote:
Originally Posted by sui_winbolo
He's violating an agreement he signed, which I imagine is good grounds for HP to sue.
An agreement based on something that will not stand in any court in the western world, mind you. ;)
sui_winbolo 9th September 2010, 17:46 Quote
Quote:
Originally Posted by perplekks45
An agreement based on something that will not stand in any court in the western world, mind you. ;)

Yeah I have no idea if it will, I'm sure the agreement goes against some right, or something.

Either way it should be interesting to see the outcome.
perplekks45 10th September 2010, 07:39 Quote
It will be because if HP win I have just another reason to never work in the US. It should be employee's rights > employer's rights and it's pretty quickly swinging the other way 'round.
sui_winbolo 10th September 2010, 14:54 Quote
I really don't care what happens to Mark Turd. (see what I did thar?)

This is just one case where someone that knows too much, and is paid too much, is slapping HP in the face by going to a rival company. He's not the everyday working man, that's why this doesn't mean anything to me personally.

It's not like America is a terrible place to work if HP wins.
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