News

HP sues Hurd, 'John Does' to block Oracle hiring

Civil lawsuit filed Tuesday claims Hurd cannot help but divulge HP corporate secrets if he takes Oracle position

HP's fired President Mark Hurd knows too much about the inner workings of HP to be allowed to go to work for competitor Oracle Corporation, HP claims in a civil lawsuit filed Tuesday to block Hurd's taking a new job.

The lawsuit alleges a "breach of contract and threatened misappropriation of trade secrets," according to the 51-page document filed in the Santa Clara County Superior Court.

The action seeks injunctive relief and a jury trial, and lists up to 25 "John Does" as codefendants.

"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 ... HP is informed and believes and thereon alleges that Hurd has put HP's most valuable trade secrets and confidential information in peril," the lawsuit states.

Hurd served as chairman of the board, CEO and president of HP prior to his firing in early August following disclosure of a sexual-harassment complaint by a woman marketing consultant. He joined HP in April 2005.

HP also alleges in the lawsuit "that each of the Does is in some way and/or manner responsible for the acts and occurrences hereon alleged, whether such acts and such occurrences were committed intentionally, recklessly or others, and that each Doe is liable to HP for the damages suffered by it."

The bulk of the lawsuit brief consists of background on HP and specific language from agreements with Hurd about protecting trade secrets and information, and exhibits.

In a section on "post-employment activities," the brief states that Hurd agreed: "If I accept a position with a Competitor at any time within twelve months following termination of my employment with HP, I will promptly give written notice" to the senior human-resources manager with a copy to HP's general counsel.

The notice would include providing information HP "needs about my new position to determine whether such position would likely lead to a violation of the Agreement."

"Hurd's failure to provide such notice before it was publicly announced by Oracle, gives rise to a reasonable inference that he is violating his trade secret protection agreements with HP," the lawsuit states.

"HP also seeks to enjoin Hurd from holding a position with a competitor in which he will serve in a capacity that will make it impossible for him to avoid utilizing or disclosing HP's trade secrets and confidential information pursuant to Civil Code section 3426.2(a)," the brief states.

HP is being represented by four different law firms in its action: Seyfarth Shaw of Los Angeles, Michael D. Wexler of Chicago, Ill., Allen Ruby of San Jose and Gibson, Dunn & Crutcher of Los Angeles.

Comments

Like this comment
Posted by Larry
a resident of College Terrace
on Sep 8, 2010 at 12:41 am

Larry failed in his attempt to buy the Golden State Warriors. Instead he wants to play war with HP. He doesn't care about Marky. Larry just wants to have some fun.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Sep 8, 2010 at 5:31 am

Walter_E_Wallis is a registered user.

I have always felt that in order to enforce a non-compete clause some percent of the salary must continue.


Like this comment
Posted by ex-EDSer
a resident of another community
on Sep 8, 2010 at 7:05 am

What trade secrets? The only thing this pinhead knew how to do was lay people off. We make cheap printers and sell $40 ink refills. What is Oracle going to do with that? [Portion removed by Palo Alto Online staff].


Like this comment
Posted by daniel
a resident of Embarcadero Oaks/Leland
on Sep 8, 2010 at 7:40 am

Don't you just love corporatism? HP makes crummy printers and outrageously expensive ink cartridges, lays offs big chinks of its work force and the two corporate officers responsible are either running for senate or fooling around with bimbos while cheating on their expense account and then get hired by the competitor so they can make untold millions and destroy their former employer. Hooray for predatory capitalism which makes any comparison to hyenas a big insult to those animals.


Like this comment
Posted by Me Too
a resident of Midtown
on Sep 8, 2010 at 7:46 am

Good point Daniel. What ever happened to that kind-spirited capitalism of yesteryear? Or those fine command economies?


Like this comment
Posted by VoxPop
a resident of Old Palo Alto
on Sep 8, 2010 at 8:09 am

Walter, I seem to remember Mr. Hurd got somewhere north of $20 million as a parting gift, even though he was fired. That ought to be enough to buy his silence for a year or two. And it's not as if he's going to have to beg for his supper.

Unless he's got more bimboes than Tiger to appease monetarily.


Like this comment
Posted by Are they serious?
a resident of Crescent Park
on Sep 8, 2010 at 8:59 am

Ok, let me get this straight: HP fires the guy and then wants to prevent him for working for anyone else? This is going to be tossed out so fast.


Like this comment
Posted by Sharon
a resident of Midtown
on Sep 8, 2010 at 9:20 am


Oracle Corp. said it will pay Mark Hurd, its new co-president, an annual base salary of $950,000 and be eligible for up to a $10 million bonus in the current fiscal year.Web Link

Looks like he has landed on his feet--$11 million + the $30-40 million in severance from HP.
He will have to watch out for Honey Traps Web Link but Ellison can coach him on that


Like this comment
Posted by Rich W.
a resident of Another Palo Alto neighborhood
on Sep 8, 2010 at 10:35 am

Rich W. is a registered user.

I am not a lawyer, but it was my understanding that non-compete agreements are generally illegal and unenforceable under California state law.


Like this comment
Posted by Barron Park
a resident of Barron Park
on Sep 8, 2010 at 10:43 am

Just to clarify: The claim here is not premised on a non-compete (which indeed, is generally not acceptable in CA). It is premised on Hurd's promise as part of the severance to not disclose HP's proprietary information and trade secrets for a period of time.

HP's position is that Hurd's very senior role and work at Oracle will inevitably and necessarily lead to disclosure of such information/secrets, whether intentionally or not.


Like this comment
Posted by Marie
a resident of Midtown
on Sep 8, 2010 at 10:46 am

Marie is a registered user.

So if Mark doesn't want to comply with his separation agreement with HP, worth $30-$40M, I think he should return the money. HP is not filing suit based on a non-compete agreement - rather the severance agreement where Mark agreed not to share any company secrets or utilize contacts made during his time at HP. Given he is intimately familiar with HP's planning for the next two years, how is there anyway he can not disclose them and do his job? How can he interact with customers without using contacts gained as HP's CEO? I think $40M is enough compensation for him to comply with his agreement for two years.


Like this comment
Posted by Sharon
a resident of Midtown
on Sep 8, 2010 at 11:15 am

Ellison is already poking HP in the eye
REDWOOD SHORES, Calif., September 7, 2010

Oracle (NASDAQ: ORCL) today issued the following statement:

“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."Web Link

They had 100s of thousands of customers in common.

This matter is going to be a huge distraction for the HP BoD and CEO candidates will not want to work @ HP with such a vindictive board over them--- that will mean HP will have to settle for an internal candidate---and chaos for some time---that will help Oracle build up its SUN hardware and software business while HP is distracted with its eye off the ball.


Like this comment
Posted by Good old boys
a resident of Evergreen Park
on Sep 8, 2010 at 11:47 am

It's nice to see the rich good old boys defending one another when they cheat. Ellison can now expect a similar defense when he needs it. Ellison runs the company like it was his private property. I wonder if the Oracle board goes along with it.
Hurd cheated on his wife and on his expenses.
What will stop him from taking vengeance against HP? What a slimy character.


Like this comment
Posted by Enough!
a resident of Palo Alto Orchards
on Sep 8, 2010 at 12:07 pm

I find it amusing. If the guy wants to work, he has the right to work. Period. As to the quality of HP Printers, as much as I hate to say it, I agree with the above. I have five HP printers, all less than two years old, that stopped working for unknown reasons. I have oft contemplated driving to HP and putting them all on the receptionist's desk with a thank you note for my losing so much time and money. My family and I now buy printers from other companies.


Like this comment
Posted by resident
a resident of Fairmeadow
on Sep 8, 2010 at 12:17 pm

Hurd is clearly a greedy unscrupulous corporate parasite. To bleed that level of money out of HP when they continue to lay-off average workers is unbelievable and without conscience.

Ellison is totally unscrupulous. He is just trying to use Hurd to get whatever information he can so that he can use it against HP.

They deserve each other.


Like this comment
Posted by Anon.
a resident of Crescent Park
on Sep 8, 2010 at 12:28 pm

HAHAHA ...

>> Posted by ex-EDSer, a resident of another community, 5 hours ago
>>
>> What trade secrets?
>> The only thing this pinhead knew how to do was lay people off. We make

That must be a pretty powerful trade secret. I just read a statistic that the CEOs that laid the most American workers off received on average 45% more pay and bonuses than other CEOs.

What kind of a country do we want to aim for, hey, pretty soon we can be just like China, Mexico or India, I guess it just depends on what kind of food more people like?


Like this comment
Posted by Anon.
a resident of Crescent Park
on Sep 8, 2010 at 12:33 pm

If Sun could not make a go of selling their crappy products I don't what Oracle expect to do with them. Some percentage of about 30,00 employees from Sun are about to be dumped on the Silicon Valley market, more fun for Bay Area unemployment and housing prices.

This is what happens when you take a great system like UNIX, and you add so much complexity that the cost of ownership becomes impossible to afford for most companies. MySQL, Apache, Firefox and all the other Open Source stuff eats your lunch.

Remind me again why we are paying these CEOs so much? Is it because they are outsourcing, or because they are destroying their businesses and American competitiveness, or just because they have figured out how to screw everyone else with no value delivered to anyone?


Like this comment
Posted by Anon.
a resident of Crescent Park
on Sep 8, 2010 at 12:55 pm

"Enough!" ... I don't know what your problem is with HP printers, maybe you are just nasty and abusive with them because I have a Deskjet 990cse, from at least 2002, and maybe older, an earlier duplex printer that still works very well on both Mac and PC?


Like this comment
Posted by daniel
a resident of Embarcadero Oaks/Leland
on Sep 8, 2010 at 4:16 pm

Carly Fiona's business model had been that the more workers she laid off, the better HP will be loved by Wall Street. This is now corporate America's business model, although the originators of this philosophy were Reagan's supply-siders and Friedmanites who were hell bent on destroying the manufacturing and industrial base of this country by encouraging corporations to use cheap labor abroad in order to increase the corporate bottom line. Hurd was just another corporatist who never tired of lay-offs while using HP money to play around with a bimbo. Instead of being content with his multi-million golden parachute, when he should have probably faced criminal charges, he moves to a competitor, and the worst predator in the Valley at that, who will use him to screw the provider of his golden parachute. As far as HP printers, each one that I owned mysteriously stopped functioning, always shortly after the one year warranty had expired. I wouldn't use one even for free-so Hurd was also responsible for providing the public crummy, grossly overpriced products on top of everything.


Like this comment
Posted by James Hoosac
a resident of another community
on Sep 8, 2010 at 5:52 pm

If you buy furniture, clothes, or electronics Made in China, then don't blame Mark Hurd or Carly Fiorina for laying off HP employees. Thousands of carpenters in North Carolina and textile workers in South Carolina lost jobs because of our collective actions.

If you think Mark Hurd is a corporate parasite, then think of the shortfall of $500 Billion that the state employee pension fund will need from California tax payers. Are the beneficiaries of such pensions parasites? Who is worse?


Like this comment
Posted by daniel
a resident of Embarcadero Oaks/Leland
on Sep 8, 2010 at 6:41 pm

I'm forced to buy some products made in China because almost nothing is made in the US anymore, thanks to outsourcing, the new American religion. Unlike Hurd, state employees do actual work and if caught cheating on their expense account to fool around with bimbos, they would probably be facing a criminal investigation, lose their job and pension, and certainly would not receive a 20-30 million dollar check upon termination. And even before he was caught embezzling his own company, Mark Hurd was responsible for very lousy printers, so yes, he is a corporate parasite extraordinaire.


Like this comment
Posted by Outside Observer
a resident of another community
on Sep 8, 2010 at 9:17 pm


"If you think Mark Hurd is a corporate parasite, then think of the shortfall of $500 Billion that the state employee pension fund will need from California tax payers. Are the beneficiaries of such pensions parasites? Who is worse?"

Perhaps you should think of the Cal PERS theft Pete Wilson did to pay for political pork. Or think of the years during good economic times when state employers were not paying their contribution to PERS, but the workers were. What did they do with the savings? Put it away for a rainy day? No, again spent on pork.

Cal PERS is no different from Social Security. Both are continually raped by politicos for their personal benefit, and both would be solvent if it weren't for these heinous violations of trust.


Like this comment
Posted by actual work
a resident of Community Center
on Sep 8, 2010 at 10:30 pm

I thought state employees were there to help the rest of us do "actual work." Why are they doing actual work?


Like this comment
Posted by Old Time Paloalton
a resident of Green Acres
on Sep 8, 2010 at 10:43 pm

Is this a surprise? Silicon Valley is big fraternity where the big boys protect each other. Right, wrong or indifferent this is the way it works. Looks at idiots like Rick Belluzzo who got run out of HP, ruined SGI, got fired at Mircrosoft and now has run Quantum into the ground. Yet he's still pulling in a $1M/year and going around makes celebrity speeches with his board members.


Like this comment
Posted by Anon.
a resident of Crescent Park
on Sep 8, 2010 at 10:50 pm

The government and country is being run by big business through the Republicans. They are so afraid of the people they are terrified of populism and they see Democracy as exactly that, populism. Companies are not national institutions anymore, so they run them into the ground and workers just scatter. We are letting our society be designed and built to keep people isolated, weak, and politically powerless ... not to mention ignorant and dependent.


Like this comment
Posted by Entitilements R US
a resident of Community Center
on Sep 9, 2010 at 4:42 am

"lay off American workers and still get the job done by outsourcing"
is the business model of all CEOs in US. Why blame Hurd. This is everywhere!

Obama is DEFINITELY creating a lot of jobs - however these jobs are being created outside US. Stimulus funds also end up India and China - US has no consumer-goods manufacturing base.

We are a country of entitlements.






Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Sep 9, 2010 at 6:05 am

Walter_E_Wallis is a registered user.

I have always felt that a non-compete requirement should continue the salary during the time of non-compete.


Like this comment
Posted by Palo Parent
a resident of Greenmeadow
on Sep 9, 2010 at 8:22 am

WEW: You are repeating yourself

I have always felt that in order to enforce a non-compete clause some percent of the salary must continue.

I have always felt that a non-compete requirement should continue the salary during the time of non-compete.


Sorry, but further commenting on this topic has been closed.

He said – she said – who is lying? Justice Brett Kavanaugh or PA resident Christine Ford
By Diana Diamond | 71 comments | 4,135 views

Global Warming Diet
By Laura Stec | 6 comments | 1,378 views

Couples: "Taming Your Gremlin" by Richard Carson
By Chandrama Anderson | 0 comments | 1,290 views

Preparing for kindergarten
By Cheryl Bac | 0 comments | 731 views

Let's Talk Internships
By John Raftrey and Lori McCormick | 0 comments | 408 views

 

Race is tomorrow!

​On Friday, September 21, join us at the Palo Alto Baylands for a 5K walk, 5K run, 10K run, or—for the first time—half marathon! All proceeds benefit local nonprofits serving children and families.

Learn More