HP Sues Hurd For Joining Oracle 301
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by
Soulskill
from the following-the-hurd dept.
from the following-the-hurd dept.
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.'"
Re:This will certainly test California law (Score:5, Informative)
From your link:
"Non-compete agreements are enforceable for partnerships and when someone is selling their ownership interest in a company. A related topic is the protection of trade secrets. A company can prevent the use of its trade secrets, but it cannot prevent fair competition"
Looks like they are trying to use the "trade secrets" protection part.
You are correct in that it should be interesting to see how it plays out.
Just my $0.02.
-JJS
Re:Should've kept him (Score:3, Informative)
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.
Re:Should've kept him (Score:5, Informative)
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 [wikipedia.org] have been disallowed by the courts...
Re:Should've kept him (Score:4, Informative)
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.
Re:Should've kept him (Score:4, Informative)
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) [onecle.com], 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.
Also (Score:4, Informative)
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.
Re:Should've kept him (Score:4, Informative)
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 [onecle.com] of the California Civil Code - this would just be additional lawsuits.
Re:Should've kept him (Score:3, Informative)
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?
Re:Should've kept him (Score:3, Informative)
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. [hp.com]
Re:Should've kept him (Score:4, Informative)
Re:Also (Score:3, Informative)
What California, in fact, says (Business and Professions Code Sec. 16600) is:
"Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."
(The exceptions (Bus & Prof Code Secs. 16601-16602.5) all deal with situations that all boil down, in essence, to allowing someone transferring an to agree not to carry on a similar business that competes with the new owner of the business.)
It doesn't seem like an agreement associated with a severance package weould be any more valid under the law than an agreemtn associated with regular employment.
Re:Should've kept him (Score:4, Informative)
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.
Re:monies? (Score:3, Informative)
Re:Should've kept him (Score:3, Informative)
No, it's not. Please,.for once, follow a link and read it [onecle.com] 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.