Hewlett-Packard has sued its former chief executive officer Mark Hurd for breach of contract; more specifically for violating a confidentiality agreement. A confidentiality agreement is a contract entered by two parties who want to ensure information shared between them is not shared with any party outside of the relationship. Often, companies ask an employee to sign non-disclosure agreements to ensure confidential information of the company remains with the company during the employee’s tenure and after departure.
HP believes by accepting a new position at Oracle, Hurd will not be able to abide by the confidential agreements he signed with HP. HP attorneys said that, “Hurd will be violating his legal obligations to HP and his trade protection agreements by working as Oracle’s President and as a member of the Board of Directors.” They also said, “He cannot perform his job without disclosing or utilizing HP’s trade secrets and confidential information.”
Not only does the suit demand monetary damages but also attempts to bar Hurd from disclosing HP’s trade secrets. Moreover, the barring of trade secret disclosure would effectively keep Hurd from working in his new role as president of Oracle. HP justifies this position by explaining that it will not be able to monitor Hurd’s daily activities at Oracle to confirm whether his actions will violate HP’s confidentiality agreement.
Interestingly, the suit does not name Oracle as a party but Hurd. Also, twenty-five individuals that facilitated the hiring of Hurd to Oracle are named as parties to the suit.
Hurd is famously known for turning around the financial health of Hewlett-Packard after being hired in 2005. He accomplished that feat through vigorous cost-cutting measures. Larry Ellison, Oracle’s chief executive, is a vocal admirer of Hurd and strongly supported Hurd when he was under investigation by HP for an unethical relationship with a marketing consultant. Hurd resigned his position at HP on August 6, 2010.
Source: PCMag.com, “HP Sues Mark Hurd for Breach of Contract,” Mark Hachman, 9/7/10