Misguided Insult To Misguided Injury: HP Sues To Stop Mark Hurd From Taking New Job

from the what-a-waste dept

Tue, Sep 7th 2010 4:01pm — Mike Masnick

The most credible explanation I've seen so far as to why HP fired Mark Hurd last month, even after it determined that he had not actually engaged in sexual harassment, was that the Mark Hurd help lead the investigation into the board over the infamous pretexting scandal, and that the whole story about the supposed harassment and fudged expense reports were just an excuse to get rid of a CEO the board didn't like -- even as he was performing tremendously well.

If that explanation is actually true, it also helps explain the news that HP is now going to sue Hurd for accepting his new job as President at Oracle. As HP's lawyers absolutely must know, California has a law that the courts have interpreted quite broadly, that says noncompete agreements are not enforceable, because you cannot deny a person the right to earn a living. HP is (weakly) trying to get around this by claiming the job shift would violate "confidentiality agreements" and trade secrets, but there's almost no chance a court buys that. The lawsuit seems like a non-starter. In fact, the only reason for filing the lawsuit really seems to be an absolute pest. It's an incredibly childish move by a company that should know better.

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Filed Under: confidentiality, mark hurd, noncompete, trade secrets
Companies: hp, oracle

23 Comments

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Anonymous Coward, 7 Sep 2010 @ 4:13pm

The general rule in California is that such agreements are not enforceable. However, there are recognized exceptions...and in this instance such exceptions may apply given the individual's broad insight into HP's current and future business plans.

If a contract is in place between HP and its former CEO concerning a severance package, this too could constitute an independent basis for challenging his going to work at Oracle.
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ofb2632 (profile), 7 Sep 2010 @ 4:45pm

I have had to sign 3 non compete agreements in my life. Each of the three became null and void if i were fired. Unless they gave him a certain amount of money and had him sign a new agreement, i think he would be in the clear. But im not a lawyer nor a greedy corporation either.
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Anonymous Coward, 7 Sep 2010 @ 4:52pm

Are HP and Oracle competitors?
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- abc gum, 7 Sep 2010 @ 5:22pm
  
  Re:
  I had the same question.
  I dont think Oracle makes printers or ink.
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  - silentsteel (profile), 7 Sep 2010 @ 9:39pm
    
    Re: Re:
    Oracle does not. HP, however, makes PCs and servers and does operating system development on Unix and Linux platforms, in addition to their recent purchase of Palm, strictly for WebOS. The competition is not such that you and I would see it daily, but they are competitors.
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    - abc gum, 8 Sep 2010 @ 4:48am
      
      Re: Re: Re:
      HP killed Alpha, not much competition there.
      I was not aware that Oracle made PCs.
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      - Hephaestus (profile), 8 Sep 2010 @ 6:42am
        
        Re: Re: Re: Re:
        "I was not aware that Oracle made PCs."
        
        Sun microsystems was purchased by Oracle. I am not sure if Sun still makes servers though.
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    - Anonymous Coward, 13 Sep 2010 @ 3:06am
      
      Re: Re: Re:
      The problem these days is that we mostly have oligopolies and most oligopolies do a little bit of everything.
      
      If he left HP to join Canon or Xerox or Konica Minolta I would be more inclined to consider it a competing industry.
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      - Anonymous Coward, 13 Sep 2010 @ 4:56pm
        
        Re: Re: Re: Re:
        (not that I have anything against companies that do a little bit of everything, they can benefit from economies of scope which can be good for the consumers. In fact, economies of scope is another reason why I tend to disfavor patents, a company that would benefit from economies of scope for releasing a new product line would have incentive to release the new product without patents knowing that competitors that don't benefit from such economies of scope won't just copy them so easily).
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- Anonymous Coward, 7 Sep 2010 @ 5:53pm
  
  Re:
  duh!
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- Anonymous Coward, 7 Sep 2010 @ 10:00pm
  
  Re:
  Oracle thinks so...they named HP in their last (May 2010) annual report.
  
  "Our enterprise software and hardware offerings compete directly with some offerings from the most competitive companies in the world, including Microsoft Corporation (Microsoft), IBM Corporation (IBM), Hewlett Packard Company (HP), SAP AG, and Intel, as well as many others."
  
  This appears to be in a section where they talk about their "Services Business". Remember that Sun is now a part of Oracle.
  
  The 2009 HP annual report, however, doesn't mention Oracle or Sun.
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- Anonymous Coward, 7 Sep 2010 @ 10:45pm
  
  Re:
  They are now, since Oracle bought Sun (hardware).
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econoline (profile), 7 Sep 2010 @ 5:04pm

laid off hp employee
as someone who was laid off at the same time that hurd was using company funds to pay former porn stars to "escort" him around I think the main mistake here was paying him off, rather than trying to have him prosecuted for stealing company funds and firing him outright. However I am surprised to learn that 40 million dollars worth of severance can not make a non compete clause enforceable, seems like a contract with compensation to me.

Regardless he should be prosecuted for insider trading as he dumped millions in stock just days before the news of his tryst/resignation became public.
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- Anonymous Coward, 8 Sep 2010 @ 11:01am
  
  Re: laid off hp employee
  Actually he filed with the SEC and dumped 775K shares, which were part of his severance, AFTER he got the boot.
  
  Why did he get them? He had options due to expire in Sept.
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out_of_the_blue, 7 Sep 2010 @ 5:16pm

One of us has misread, and I think it's you, Mike:
'According to �The Big Lie: Spying, Scandal and Ethical Collapse at Hewlett-Packard,� an authoritative account by the former BusinessWeek writer Anthony Bianco, Mr. Hurd was very involved in H.P.�s efforts to hunt down the leakers. After the scandal broke, he hijacked H.P.�s internal investigation, hiring an outside law firm and ordering it to report directly to him, instead of the board, which is the normal practice.'

'�There is plenty of evidence from H.P.�s own documents that he had a much bigger role in starting the investigations and carrying them out than he ever let on,� Mr. Bianco said. �H.P. security had a SWAT team to root out the leakers. They were clearly trying to please him.�'

>>> Repeating from above: "Mr. Hurd was very involved in H.P.�s efforts to hunt down the leakers" -- Hurd was evidently NOT going against the board, so I fail to grasp what you mean by "help lead the investigation into the board". -- And they paid him $40 to $50 million to leave, they hate him *so* bad.

The HP board was merely minimizing liability by denying the sleazy allegations.

Oh, and the employees hate Hurd too. The 2nd page of the first link, and comments by alleged former employees on other forums support that.
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- zegota (profile), 7 Sep 2010 @ 7:24pm
  
  Re: One of us has misread, and I think it's you, Mike:
  Without commenting on the rest of the issues, many (most?) employees of large companies dislike upper management and executives, and especially the CEO.
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  - Jeremy7600 (profile), 7 Sep 2010 @ 9:08pm
    
    Re: Re: One of us has misread, and I think it's you, Mike:
    When I worked at Xerox I liked Anne Mulcahy. If I was still there I would (as I do now) like Ursula Burns, too.. They both do good business, more than you can say for someone like Carly Fiorina.. (speaking of HP, as we are)
    
    I'm probably the exception to the rule, though.
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  - abc gum, 8 Sep 2010 @ 4:51am
    
    Re: Re: One of us has misread, and I think it's you, Mike:
    re: Fiorina
    And many continue to dislike them after they leave.
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Anonymous Coward, 7 Sep 2010 @ 5:37pm

This is just another reason why we need stronger Anti SLAPP laws? or whatever laws that will punish corporations from doing this nonsense.
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- Anonymous Coward, 7 Sep 2010 @ 9:36pm
  
  Re:
  Some quotes from the NYTimes article:
  
  "Even Mr. Hurd�s temporary replacement, the chief financial officer, Cathie Lesjak..."
  
  "What H.P. needs in its next leader ... is ... That is a tall order, but not an impossible one. It is certainly plausible that the H.P. board can find such a person. Given its recent track record, though, don�t hold your breath."
  
  So HP has an temporary CEO while they look for a more permanent one. In the middle of their search to fill this position, they are suing the previous CEO.
  
  Now should the HP board find a suitable candidate, would he want this position?
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Kurto (profile), 8 Sep 2010 @ 4:31am

Non-Compete not universal?
I was under the understanding that non-compete clauses were almost always unenforceable throughout the developed world, (except where very limited restrictions are deemed reasonable) as here in the UK.

Do some states enforce such draconian agreements?
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angry dude, 8 Sep 2010 @ 6:19am

nice to be CEO
Screw your own company, get a multi-million dollar exit package from the board, get hired next day by a rival company for a handsome salary...

Isn't it nice to be CEO in America, Mikey ?

But of course, you are not a real CEO, just a little punk
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- abc gum, 8 Sep 2010 @ 7:26pm
  
  Re: nice to be CEO
  Isn't it nice to be an angry dude in america, angry dude?
  But of course, you are not a real angry dude, just a little punk.
  
  btw ... this all Mikes fault
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