HP is suing the former CEO, Mark Hurd, for violating a severance agreement. Hurd was recently named the new president of Oracle. HP is claiming that Hurd is threatening their trade secrets and confidential information by accepting the position with Oracle.
Confidentiality at HP
Since Hurd signed agreements that protect HP against the release of information by him, they are taking the legal path to ensure they are enforced. HP is also claiming that Hurd cannot proficiently perform his job without revealing some of their secrets. However, Hurd did not sign a non-compete contract so he is within every right to accept the position at Oracle.
The Severance Package
Surprisingly, this is a common issue in the technology world. The confidentiality agreement that Hurd signed was a segment of his severance package from HP which is over $40 million. These agreements are pretty standard within the technology industry because any employee could simply walk out with a plethora of vital information that could prove to be detrimental to the success of the company.
The Primary Difference
The main difference with Hurd is that he is not a run of the mill employee. He is the former CEO and privy to most of the company’s main secrets. There is a good chance this lawsuit will delay his start date at Oracle.
HP and Oracle
This lawsuit is showing the growing tension between the two companies. HP and Oracle have worked together for over 25 years to ensure product compatibility with one another. That relationship is becoming strained because Oracle is now selling servers as a competitor to HP. This was acquired through the $7.4 billion acquisition of Sun Microsystems in 2009.
Oracle is best known for their software which is used by airlines and banks to make transactions. Their software helps companies map all their information into a central location and then easily access it. Oracle is the world’s leading database software developer and is now tied with HP for being the world’s number one seller of servers.
The tensions were already high between these two companies so the addition of this lawsuit will not fare well. This is difficult litigation because there is no proof that Hurd will or will not share the secrets of HP. If Oracle begins creating products that are similar to those that HP makes, then that will be a clear indication of this maleficence.