HP Files Civil Complaint Against ex-CEO Mark Hurd

I’d rather not report on this kind of thing, but it looks like HP has filed a complaint against Mark Hurd given his recent decision to join Oracle and serve as “Co-President” with CEO Larry Ellison. Here’s the gist:

“Despite being paid millions of dollars in cash, stock and stock options in exchange for Hurd’s agreements to protect HP’s trade secrets and confidential information during his employment and following his departure from his positions at HP as Chairman of the Board, Chief Executive Officer, and President, HP is informed and believes and thereon alleges that Hurd has put HP’s most valuable trade secrets and confidential information in peril.  Hurd accepted positions with Oracle Corporation (“Oracle”), a competitor of HP, yesterday as its President and as a member of its Board of Directors.  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.”

Now, this shouldn’t have much influence on webOS or the Palm roadmap. HP is a big company with many most-autonomous units churning out products and services regardless of what’s happening on the periphery. But, it doesn’t take time and energy away from the HP decision makers and could slow down the selection of a new CEO. And, that new CEO could have an impact on HP’s strategic direction in mobile and otherwise, and that could have an impact on Palm and webOS. So, it’s news that we should all be aware of and, at least, keep in the back of our minds.

With that said, nothing to see here. Feel free to move along.

Update: Incidentally, I hadn’t mentioned my thoughts on the lawsuit itself. After seeing a few folks on Twitter respond that perhaps HP is wrong to file the complaint, let me say: Hurd signed an agreement with HP not to disclose confidential information and trade secrets. I personally find it inconceivable that Hurd could do the job at Oracle without utilizing his inside information about HP to Oracles advantage. Thus, I think that his going to work for a competitor so soon after leaving HP is necessarily a violation of his contractual agreements, and HP is right to file suit.

Update 2: Oracle’s never been one to take things sitting down, and their response to the lawsuit has been swift and—considering—ferocious. They’re definitely taking the gloves off with this statement, as reported by ZDnet:

Oracle has responded to the HP lawsuit against Hurd. Here’s what Oracle said:

“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.”

Of course, Oracle has been making their own moves into hardware, and so the partnership is likely to experience some strains in any event. And really, hiring HP’s ex-CEO wasn’t exactly the move of a strong “partner,” either.

Update 3: Looks like HP, Oracle, and Mark Hurd have made friends again, with Hurd essentially giving up a chunk of his severance package and promising not to divulge HP’s sensitive information. So, this one can finally be put completely to bed (probably). From HP’s SEC filing on the matter:

On September 20, 2010, Hewlett-Packard Company (“HP”) announced that it had resolved litigation commenced on September 7, 2010 against Mark V. Hurd, HP’s former Chairman of the Board of Directors, Chief Executive Officer and President, for alleged breach of contract and threatened misappropriation of trade secrets in connection with Mr. Hurd’s employment with Oracle Corporation.  As part of that resolution, HP and Mr. Hurd agreed to modify the terms of the Separation Agreement and Release entered into between them on August 6, 2010 (the “Separation Agreement”), a copy of which was filed as Exhibit 10.1 to a Current Report on Form 8-K filed by HP with the Securities and Exchange Commission on that same date.  Under the terms of the modification, Mr. Hurd has agreed to waive his rights to the 330,177 performance-based restricted stock units granted to Mr. Hurd in January 17, 2008 referenced in paragraph 2.d. of the Separation Agreement and to the 15,853 time-based restricted stock units granted to Mr. Hurd on December 11, 2009 referenced in paragraph 2.e. of the Separation Agreement, which collectively represent the only remaining compensation that Mr. Hurd was entitled to receive under the terms of the Separation Agreement.  The terms of the Separation Agreement have not otherwise been modified.

HP put it this way in a press release:

HP (NYSE:HPQ) and Oracle Corp. (NASDAQ:ORCL) today reaffirmed their long-term strategic partnership and the resolution of litigation regarding Mark V. Hurd’s employment at Oracle. While the terms of the settlement are confidential, Mr. Hurd will adhere to his obligations to protect HP’s confidential information while fulfilling his responsibilities at Oracle. The agreement also reaffirms HP and Oracle’s commitment to delivering the best products and solutions to their more than 140,000 shared customers.

“HP and Oracle have been important partners for more than 20 years and are committed to working together to provide exceptional products and service to our customers,” said Cathie Lesjak, chief financial officer and interim chief executive officer, HP. “We look forward to collaborating with Oracle in the future.”

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