HP Sues Mark Hurd Over Oracle Competition

HP said on Tuesday that it had filed a civil lawsuit against former CEO Mark Hurd in response to news on Monday that Hurd had been hired by Oracle as President and had joined the database company's board of directors.

"Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information," HP said in a statement. "HP intends to enforce those agreements."

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Hurd was forced to resign in early August following an internal investigation of sexual harassment claims brought by a former HP contractor and revelations of expense accounting irregularities. Oracle CEO Larry Ellison, a friend of Hurd's, called HP's decision to fire Hurd "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

Ellison declared his support for Hurd more directly on Monday in a statement announcing Hurd's hiring as Oracle's President. "Mark did a brilliant job at HP and I expect he'll do even better at Oracle," said Ellison.

That's a view shared by some observers of the industry.

HP's complaint says that Hurd signed agreements not to disclose HP trade secrets and confidential information three times during the past three years and that his new position at Oracle puts him in "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 the complaint, the agreements Hurd signed obligate him not to provide services to a competitor for 12 months. However, this stipulation applies only to services that involve the sharing of confidential information while Hurd remains a resident of California, which limits covenants that restrict employment.

The legal filing claims that Hurd's public statement on Monday that "...Oracle’s strategy of combining software with hardware will enable Oracle to beat IBM in both enterprise servers and storage" represents a deliberate effort to downplay the competitive significance of his move to Oracle.

"As Hurd well knows, IBM and HP are competitors of Oracle in the enterprise servers and storage business," the complaint says. "Hurd's clear effort to avoid mentioning HP is telling in light of Oracle's own SEC filings identifying HP as a competitor."

HP is seeking injunctive relief and written guarantees to ensure Hurd's compliance with the agreements he signed. It is also seeking monetary damages for "willful and malicious conduct."

Oracle did not respond to a request for comment.

Such lawsuits are common when high level executives move between companies. In October, 2008, IBM sued former executive Mark Papermaster when he joined Apple. The suit was settled in January, 2009 with the requirement that Papermaster delay his employment with Apple until April and that he continue to certify his compliance with his IBM employment agreement for several months.

Microsoft filed a similar lawsuit in July, 2005 when Google hired former Microsoft employee Kai-Fu Lee. That lawsuit was settled in December of that year.