Slashdot Mirror

← Back to Stories (view on slashdot.org)

HP Sues Hurd For Joining Oracle

Posted by Soulskill on from the following-the-hurd dept.

CWmike writes "Hewlett-Packard is reported to be suing former CEO Mark Hurd, who was named co-president of rival Oracle on Monday. The Wall Street Journal first reported the news, and has now posted the full text of the suit on Google Docs. Among other things, it says, 'In his new positions, Hurd will be 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.'"

8 of 301 comments (clear)

  1. Re:This will certainly test California law by JeffSpudrinski · · Score: 4, Informative

    From your link:

    "Non-compete agreements are enforceable for partnerships and when someone is selling their ownership interest in a company. A related topic is the protection of trade secrets. A company can prevent the use of its trade secrets, but it cannot prevent fair competition"

    Looks like they are trying to use the "trade secrets" protection part.

    You are correct in that it should be interesting to see how it plays out.

    Just my $0.02.

    -JJS

  2. Re:Should've kept him by Local+ID10T · · Score: 4, Informative

    Unless there's a signed "non-compete" document from Hurd, HP will just have to live with their mess up.

    In California, non-compete agreements have been disallowed by the courts...

    --
    "You want to know how to help your kids? Leave them the fuck alone." -George Carlin
  3. Re:Should've kept him by Mongoose+Disciple · · Score: 3, Informative

    No, they don't apply at all. Any non-compete clauses in a contract are invalidated by California law.

    That's true in the general case, but California law still allows a company to sue to prevent use of its trade secrets, which is the angle HP is taking here.

  4. Re:Should've kept him by tomhudson · · Score: 3, Informative

    Any non-compete clauses in a contract are invalidated by California law.

    So Hurd can never leave California to visit an Oracle office elsewhere without being slapped with a lawsuit in another jurisdiction. Sounds like HP will enjoy that :-)

    They're alleging

    1. misapropriation of trade secrets (article 2 of the complaint)
    2. breech of contract (article 3 of the complaint)

    They cite California Civil Code 3426.2(a), so no, contracts are not automatically invalidated - it depends on the terms of employment.

    California Civil Code Section 3426.2

    (a) Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.
    (b) If the court determines that it would be unreasonable to prohibit future use, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time the use could have been prohibited.
    (c) In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.

    It's quite simple - his new job at Oracle puts him in a position where he will be violating HP trade secrets. He simply cannot work as the CEO of any large US IT company without attracting such a lawsuit.

  5. Also by Sycraft-fu · · Score: 3, Informative

    This could have been different in that it may have been required to get his bonus. That sort of thing is almost always legal, since it is regular contract law. You come work for me, we have a normal employment agreement. However I say "You know, there's a lot of stuff you are privy to that I don't want getting out. So if I lay you off, I'll give you a big bonus, but in turn for that you can't go work for my competitors, you can't write an expose book, and so on."

    Now of course you don't have to do agree to that, but if you don't, you don't get the bonus.

    So while California may well say "You can't have a non-compete on normal employment," a termination bonus is a different thing.

  6. Re:Should've kept him by tomhudson · · Score: 3, Informative
    If you get caught breaking a law in Kansas, you don't get to argue that you should be tried in California. the minute he steps out of California, he opens himself up to additional lawsuits, because of the venue the breech of contract is taking place. He goes to attend a meeting on behalf of Oracle in New York, that's where he commits the breech, that's the proper venue.

    He got over $12 million as a separation payment in which he specifically reaffirmed that he would not work for a competitor for a year. Oracle names HP as a major competitor in the 10k SEC filing. Both he and Oracle are properly being sued already under section 3426 of the California Civil Code - this would just be additional lawsuits.

  7. Re:Should've kept him by s73v3r · · Score: 3, Informative

    Except, he's in California. Non-competes aren't worth the paper they're written on here, and for good reason. HP has absolutely no right to tell him what to do after he leaves their employ.

  8. Re:Should've kept him by DragonWriter · · Score: 3, Informative

    HP is incorporated in Delaware, not California.

    So what? HP's own lawsuit notes that HP's "world headquarters and principal place of business" are in California, and that Hurd was employed in Santa Clara, California, the suit is filed in a California court, and seeks remedies under California law.