HP sues Oracle for hiring former CEO Mark Hurd

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The world’s largest computer maker Hewlett-Packard has filed a lawsuit against database giant Oracle for hiring former HP CEO Mark Hurd as co-president. The civil complaint, filed in California Superior Court, claims Hurd will “inevitably” disclose HP trade secrets in his new role at Oracle, violating the non-disclosure agreement he signed with HP prior to resigning from the company in August. The suit seeks injunctive relief and damages, as well as an order that would prevent Hurd from accepting a position with a competitor.

“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 complaint reads, in part.

Although HP and Oracle have deep, long-standing business ties, the companies are increasingly competitors of each other, particular since Oracle’s acquisition of Sun Microsystems, which puts Oracle in the server and storage hardware business.

Responding to the suit, Oracle CEO Larry Ellison noted: “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.”

Hurd resigned from HP’s top post last month after the HP board concluded that Hurd had violated the company’s code of business conduct in his relationship with a HP marketing contractor. Hurd was not accused of sexual harassment.

Although Oracle head Larry Ellison is never one to shy away from a fight, the lawsuit could become a cloud hanging over Hurd’s head. If HP were to win the suit, Ellison would be deprived of an executive he regards as one of the most talented in the industry; if the suit drags on for months (or years), Hurd’s effectiveness at Oracle could be significantly impacted. Oracle may find itself in a position where it would be more effective to reach a settlement with HP than fight the case in court.