Last updated: September 8, 2010 12:48 am

HP sues to block Hurd’s move to Oracle

Hewlett-Packard has sued to block Mark Hurd, its former chief executive, from taking up a senior role at Oracle, adding a twist to a saga that has transfixed Silicon Valley.

The lawsuit, filed on Tuesday in a California court, came a day after Mr Hurd became a co-president at Oracle, giving him a key role as the software maker competes with HP in computer hardware. The suit seeks an injunction preventing Mr Hurd taking up the role.

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Oracle agreed to pay Mr Hurd an annual salary of $950,000, making him eligible for a bonus of up to $10m in 2011. According to a regulatory filing, Mr Hurd’s target bonus next year is $5m.

The appointment marked a quick return for one of the industry’s most highly regarded executives. He was forced out by HP’s board in August after being found to have breached its code of conduct by mis-stating expenses linked to a relationship with a former HP marketing consultant.

HP said it had gone to court to protect important information. “In his new position, 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 suit said.

Mr Hurd’s severance deal did not have a non-compete clause, said a person familiar with the issue. But he had signed agreements with HP preventing him disclosing trade secrets, the lawsuit says.

Lawyers predicted HP would struggle to prevail since California courts have been unwilling to bar executives from switching employers in cases involving “inevitable disclosure”.

“California does not enforce non-competes and it does not allow you to shoehorn anything else into a non-compete,” said Stephen Kramarsky, a partner in Dewey Pegno & Kramarsky.

HP has asked the court to block Mr Hurd from “holding a position with a competitor in which he will serve in a capacity that will make it impossible for him to avoid utilizing or disclosing HP’s trade secrets and confidential information”.

Oracle reacted angrily to the suit. “Oracle has long viewed HP as an important partner,” said Larry Ellison, chief executive. “By filing this vindictive lawsuit . . . the HP board is acting with utter disregard for that partnership.”

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