HP sues Oracle over hiring of sacked CEO [Update]

The complaint filed Tuesday in a California state court came only hours after Oracle CEO Larry Ellison confirmed Silicon Valley scuttlebutt that Hurd – a close personal friend – would take up a senior post at Oracle. Hurd is set to step into the shoes of departing Charles Phillips as co-President of the firm. Hurd was sacked from his role as CEO at HP following allegations of sexual harassment and fraudulent expenses claims. 

 

That is, he will step into those shoes if HP fails to cause problems with the move. In its suit, HP claims that Hurd will not be able to perform his role  at Oracle without divulging  HP's trade secrets and violating a confidentiality agreement. Hurd signed such an agreement as part of a severance package from HP that could top $40 million.

 

The suit says Hurd is in violation of the confidentiality agreement that is part of his severance package. According to the law suit, HP paid Hurd millions of dollars in cash, stock and stock options in exchange for protecting the company's trade secrets and confidential information for two years. Furthermore, the suit says Hurd signed several non-disclosure agreements during his time with company.

 

"Hurd was placed in a high level with access to all of HP's most important trade secrets and confidential information requiring research and development, marketing, strategy, customer contacts, target acquisitions, merger opportunities, allocation of resources, pricing, margins, profitability, customer initiatives, leadership and talent initiatives and other confidential information," the complaint says.

 

Intriguingly the suit also says Hurd was given a highly confidential internal analysis of Oracle on March 18, 2010, noting that Oracle  is now regarded by HP as a clear rival in the tech industry.  It adds Hurd also violated his agreement with HP by failing to notify them about his new job with Oracle.

 

HP is seeking compensatory and exemplary damages. It also is looking for immediate injunctive relief to protect trade secrets and confidential information.

 

While HP is unhappy with Hurd's move, investors applauded it with Oracle's share price rising on Wall Street. As Oracle transitions from a software to a hardware company, who better than him?" said Brent Thill, a UBS analyst. "They're looking for someone who can take the company above $30bn. He ran a company that was more than $100bn."

 

Oracle has now issued a statement regarding HP's actions. “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."