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HP Sues Hurd For Joining Oracle
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.'"
The GNU this was going to happen.
Hurd and Oracle only to find out once again it's talking about this guy. Man, he should really change his name.
Such as, maybe, giving Larry her phone number?
Why, without your clothes, you're naked, Miss Dudley!
That's all.
Anything can be found funny, from a certain point of view.
Somebody makes sure that lowly IT workers get served up with non-compete clauses in contracts, but the guy at the top didn't?
"Common sense will be the death of us all"
California has a pretty clear cut law that makes almost all non-compete clauses NULL and VOID. It'll be interesting to see how this one plays out.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
That's pretty much it.
Unless there's a signed "non-compete" document from Hurd, HP will just have to live with their mess up.
I'd be surprised if Mr. Hurd signed such a document.
Just my $0.02
-JJS
That's right, HP, kick Oracle where it hurds!
Be relentless!
The lawsuit isn't about Oracle competing with HP, it's about disclosing HP trade secrets. At this stage I doubt HP has any real secrets left though as their development seems quite stale.
Also, they are demanding immediate injunctive relief... which court is available that can read this complaint today. With courts slammed and Congress unable to approve judges (or do much of anything useful), where will anyone be able to provide "immediate" injunctive relief?
Lastly, Hurd hasn't done anything yet. They are finding him guilty without any proof, before the fact, and without due process. Boy is HP a bunch of brats... "we can't have him and you can't either".
At least they didn't try to have him killed.
Non-disclosure/non-competes still apply after you leave - more so when you're fired for cause. You *can* challenge them if you were terminated w/o cause, but that's not the case here.
No, they don't apply at all. Any non-compete clauses in a contract are invalidated by California law.
I'm just surprised Oracle wanted him. From what I've heard about Hurd, he can be unstable, and isn't quite ready for daily use.
You are given the parachute in return for the non-compete clause. Therefore you are being compensated for not just getting fired and going to the competition and spilling your guts. The grace period lets your knowledge specific to the company go out of date.
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
Secret 1: Outsource everything.
Secret 2: Employees are interchangeable.
Secret 3: Good enough is probably too expensive.
Secret 4: There is still at least enough good will for the HP name to milk another five years.
The ______ Agenda
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.
...and decides to go to Oracle, is that considering 'following the Hurd?"
Don't fear the penguins
Personally I am rooting on Hurd because that will help many of the little people too with these same clauses. I think that if they do not want him working for a set period of time, then then need to pay him for that time based on current salary (same as any other worker whom they do not want to work for the competition). That would make things fair for both sides.
You sign a non-compete agreement, then immediately sign up with one of the companies biggest competitors!
Either Hurd is actually a complete and utter moron or he has nads the size of Jupiter! I'm going with the latter.
At least they didn't try to have him killed.
How would we know? A comically small cardboard cutout of a piano falling on his head? A swath of underpaid Chinese martial artists that surround him, then are summarily laid off? Someone tries to shoot him with an HP branded Smith & Wesson, with "Innovate" written on the bullets, but nobody can get the bullets to move?
The ______ Agenda
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
They cite California Civil Code 3426.2(a), so no, contracts are not automatically invalidated - it depends on the terms of employment.
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.
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.
Especially since he signed a separation agreement that paid him $12,224,693.00 in return for keeping those secrets, and agreeing not to accept employment that would conflict. He can now kiss that money good-bye, as the lawyers will eat it up.
California is a Right to Work State, you want to sue to prevent someone from having a job? Then move to Washington or New York.
Here in California we recognize the need for a person to earn a living plying their skill is more important than your need to treat people like property.
But hey, since those lawyers are salaried, better to use them to harass Mr. Sexual Harassment to put those payroll dollars to work am I right?
In California, non-compete agreements have been disallowed by the courts...
That may allow him to work at Oracle, barring trade secret or proprietary information issues, but it may not allow him to keep all of his severance. I think you may be able to pay a person not to work for a competitor for a reasonable time frame. They still have the right to do so but may be required to return the payment.
Depends on where Hurd was employed as a lot of companies incorporate in Delaware for tax reasons - I could see companies doing similar things with employment ie their Catberts shop around for an employer friendly state and make them "mobile" workers who are “employed” in the employer friendly state.
Basically at this level you hire expensive barristers and attempt to rip the other side to pieces in court – I suspect that HP will bring up all the “dirt” that they hid when Hurd left – presumably under the American equivalent of a “compromise agreement”
This has happened before. I think it was with some Microsoft employee living in CA that went to work for Google. I can't remember the specifics. Though they still hired the guy it was agreed that he wouldn't be used in a position that directly exposed his knowledge gained from his prior job.
In reality, though you can't limit it all. Some people need to work and some are highly specialized. It would be onerous to force people to comply with non-compete clauses (if they were valid in CA). In this case, the termination would probably play a bigger role than if he were to have left on his own. Had HP sued him for leaving on his own with the intent of disclosing trade secrets that would have been another matter. But he was fired and to find gainful employment at his level of expertise he would have to disclose some information. This has to be accounted for.
Frankly, this is simply spiteful behavior on HP's part. In the end, after the suit has ended, if it goes to trial, I'm sure we'll find out more about how HP and Hurd parted ways--particularly the fact that their now in charge CEO illegally aired Hurd's dirty laundry--which it is well known that an employer is forbidden from doing that. I'm sure Hurd will have his own leverage against the board and Chairman.
You can lead a man with reason but you can't make him think.
"confidentiality means nothing"
I'm curious why you believe this.
Probably because it's true. Once you're no longer working for the company you are no longer under any obligation to keep anything secret, unless you've agreed not to, either in writing or as a part of a verbal agreement. I used to work for a company that required all kinds of silence about just about everything. The moment I quit though, I stopped being silent about any of it. At that point there wasn't a damned thing they could do about it as I hadn't agreed to remain silent after separating from the company, and they knew I had the goods to prove everything I was saying. And more really, because I had documentation on other things that they'd been doing which I haven't leaked.
He was paid so much money it that crossed the mystical line into the "plural money" category. Like, "mo money" except much much mo.
Welcome to the Panopticon. Used to be a prison, now it's your home.
Hurd has overall knowledge but non-specific. His job was to direct the goals of the company. It wasn't to design chips, OSes, etc. His knowledge is about the direction the company was going, how to set up their priorities, how to spend and grow. He didn't have specific knowledge about the coding of projects or the design of hardware, just the direction those would take.
Oracle and Ellison are not really competitors to HP in the vast majority of areas where Oracle generates revenue (Oracle is primarily a relational database company selling to big companies). HP's competing OS is a non-starter. Even Oracle's acquisition of products from Sun wouldn't be such a major threat in any market to HP. As far as business models go Oracle's and HP's are probably quite different as they target different markets for the most part, as Oracle doesn't make printers nor desktop PCs and what they do compete with is probably limited to server markets where HP just doesn't have that much moxy.
If they try to limit Hurd's overall knowledge exposure they'll loose, they'll have to overcome years of legal history where one CEO goes to work for another company. And, this is HP's burden. HP must prove what they claim.
You can lead a man with reason but you can't make him think.
No, this is another Hurd, with another mascot: Sexual Harassment Panda.
He was paid by HP shareholders to be loyal to them, not to be loyal to workers.
Sometimes, for a manager, loyalty to the shareholders includes loyalty to the employees. Otherwise, shareholders lose access to valuable human resources.
Mark Hurd's success is directly tied to the amount of people he can. He's absolutely known as a hatchetman, and will do so at the drop of a hat. The problem is, it works...he doesn't care about the employees, just the board, and doing what he does best makes them very happy.
Hurd used to be the CEO for NCR when I worked for him, and he did the same thing there....from there he moved to HP, and whacked something in the ball park of 7-9k jobs right away. Nothing will make a company look profitable faster than cutting payroll.
That being said, and my overall feeling for the guy is that he is a complete douche...HP screwed up in letting him go, plain and simple. As someone mentioned, you can't have it both ways, HP.
Secondly....I've followed this story a little bit, due to my knowledge of the man, and doesn't it seem to anyone else that the whole breakup w/ arguably their most successful CEO in a very long time, went really fast and really quietly?? (relatively speaking)
I believe there was more to the story as to why he left HP...what that it is,the world may never know.
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.
Absolutely wrong. You file suit in your home jurisdiction, or in a jurisdiction that you think is neutral, but almost never in the defendant's home jurisdiction. The court that you file suit in needs to have personal jurisdiction over the defendant, so in some cases you may be forced to sue in a defendant's home juristiction (e.g., if they never travel to or conduct business in your state). Large contracts frequently specify both choice of law and venue, in which case that issue is (mostly, for true negotiations) off the table. Venue can be transferred in other situations, but it's a balance of convenience, not for the mere convenience of the defendant. Seemliness is relative. The party suing is the party that was allegedly injured. Forcing them into the other party's home jurisdiction is also unseemly. If Joe Schmoe sues HP, is he supposed to sue in Delaware, or does your seemliness evaluation side with whoever isn't the corporation?
Also, the agreement specifies that he will indemnify HP both for proven damages as well as statutory damages. If the courts look at the evidence from the face of the agreement - that his non-compete was worth $12,224,693, and decide to fine him triple damages, and then we throw in the lawyer's fees, there's over $50 million just out of his pocket. Then there's Oracle and John Does # 1 through 25.
Are you kidding? HP has been #1 in the server market for 8 straight years. A lot of Oracle stuff runs on HP equipment, and Hurd knows enough about HPs marketing and internals to help Oracle squeeze better margins out of HP.
the point is you can't prove nor disprove. which is exactly why companies bar you from going to competitors. He may think he is not using or exposing trade secrets and is safe but then again that is how security leaks start. Humans are weak. in all cases he cannot do an effective job against the competitor with out using knowledge he knows about the competitor. its that simple.
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.
There's a limit to what they can force non-disclosure on. Otherwise, it would be a one hit wonder for so many managers and executives.
No. Trade secrets and proprietary information are off limits in perpetuity as long as the company properly identified and secured such information and continues to do so.
I think what you are getting at are the experience and general skills a person develops on the job. These are things that may be taken from job to job without restriction.
Lets say that while at HP Hurd developed personal business relationships with executives at company A. Lets say he has experience negotiating with company A. Now that he is at Oracle he is free to leverage the personal relationships and negotiating experience (what are the other sides tells, general strategies, etc), but he is not allowed to use any information he has about HP contracts or deals in his decision making process or negotiations. Due to the difficulty of doing the later courts have sometimes prohibited executives from engaging in certain activities at their new employers.
HP's Board may be pretend to be aggrieved, but there is little they can do. California basically bans non-compete clauses. Some lawyers will get rich, and it will all be settled out of sight.
It would be more convincing if HP weren't such d@mned hypocrits: they complain of corporate secret leakage, yet they hired in Carly Fiorio as CEO from Lucent to get networking going and Mark Furd himself from NCR. Both "closer" in market terms to HP than Oracle is.
I think the HP Bored is just unhappy Mark bounced back quickly and very vexed the market agrees with him (Oracle's stock when up, HP down). Arrogant SOBs. I'd be embarrassed to work for them. Or buy their products.
Plus, he's a freaking Executive, what the hell secrets does he know besides who's in bed with who (financially or physically) on the board? It's not like any corporate executive today actually has anything to do with actual development of product, they're there to provide 'leadership' and drain the pension funds into their own bank accounts.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
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.
what the hell secrets does he know besides who's in bed with who
That in itself is not worthless. However executives also know what markets the company is planning to go after, what new products just started in development, what companies may be acquired and why and for how much, and so on. This stuff is far more valuable than a schematic of a "new" inkjet.
If he hasn't signed a specific contract, where HP pays him for not working for competitors, HP can't do anything. I think this is just an intimidation tactic, which will have zero effect on Oracle. It's not like Oracle lawyers weren't consulted about hiring a major executive from a major competitor. I'm sure Hurd's lawyers and Oracle lawyers spent many hours together sorting it out before anything became public.
"monies" = multiple sums of money; different payments. This is a financial term, and it is used correctly here. Google it.
He's not competing. He's moved to a technology company. :-)
PDFs, particularly this kind of PDF hosted on a party to a legal action's site, disappear once the matter is settled. It's rude to subject the future generations of web historians to so many blank links. Also, I heard once that Windows clients have some security issues with PDF viewers that make promotion of the filetype directly less than considerate. Third party hosting at a minimum is the responsible thing to do, and reposting through a trusted translation service is also kind.
Help stamp out iliturcy.
If we want to pursue the red herring further, look at the venue-shopping that went on in all the SCO litigation. (or have you forgotten that suse sued and won outside the US)?
However, Hurd is screwed under California law, so it doesn't matter. What he did was illegal under California's civil code, and HP is calling Oracle to account over it. The guy agreed to a payment of over $12 million on August 6th (see page 47 of the exhibits) in return for his agreement not to do what he just did exactly one month later. This screams bad faith.
If there is even ONE email between Hurd and Oracle, ONE phone call - he's dead meat.
No, it's not. Please,.for once, follow a link and read it instead of believing the echo chamber that is most of slashdot's uninformed masses.
Here - since everyone is so brain-dead when it comes to actually doing any research ... he's being sued under California statute 3426.2
In other words, the separation agreement which he received over $12 million dollars to sign on August 6th, and which he violated less than one month later (because the deal had to be in place before it was announced) is in full conformity with California law. The agreement puts in writing both parties rights and obligations under California law.
This (their hiring of Hurd) also tells us that Oracle doesn't have a clue as to what to do with Sun's server division. Since the future of Sparc is already iffy at best, it looks like Ellison may one day be able to add Sun Servers to his "OraKILL hit list".
The discovery will be deep and ugly, because the acquisition of Sun by Oracle left a lot of people who have a story to tell and would be willing to talk - and that was before the last month of shenanigans.