HP Sues Ex-CEO Hurd over Oracle Position

HP is suing ex-CEO Mark Hurd a day after he was hired by Oracle, saying he cannot serve as Oracle's co-president without violating a confidentiality clause in his severance package.

Hewlett-Packard reportedly is suing former CEO Mark Hurd to stop him from taking a position with rival Oracle.

HP sued Hurd Sept. 7 in the Superior Court of California in Santa Clara after Oracle officials announced Sept. 6 the company was hiring Hurd as co-president. Hurd signed a confidentiality agreement with HP as part of his $40 million severance package, and HP officials said they do not believe he can honor that agreement if he takes a position with Oracle.

According to the Wall Street Journal, Hurd's severance package includes an agreement stating that during a two-year period Hurd cannot disclose sensitive information related to HP. However, the agreement doesn't contain a noncompete clause, according to the WSJ.

"Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information," HP said in a statement. "HP intends to enforce those agreements."

Oracle is increasingly competing with HP in such areas as software and now servers and storage, following its $7.4 billion acquisition of Sun Microsystems earlier in 2010.

Oracle is looking to grow from a software vendor into a full-service IT vendor, which will bring it into closer competition with the likes of HP and IBM.

Analysts say Hurd can help the database software maker with that growth thanks to his experience running HP, a large IT vendor with an array of products and one that acquired and integrated a number of companies during his five years at the helm.

Hurd resigned from HP Aug. 6 after a former contractor accused him of sexual harassment. Though an internal investigation found no grounds for the sexual harassment claim-and the contractor, Jodie Fisher, said she has settled her complaint with Hurd for an unspecified amount of money-HP officials and board members did find that Hurd falsified some expense reports to cover up his personal relationship with Fisher.

The board said the fudged expense reports violated HP business policies.

Four days later, Oracle CEO Larry Ellison, a close friend of Hurd, blasted the HP board in an e-mail to the New York Times, saying letting Hurd go was "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them."

Ellison wrote, "In losing Mark Hurd, the HP board failed to act in the best interest of HP's employees, shareholders, customers and partners."