Mark Hurd Lands at Oracle, Is Immediately Sued by HP

Former HP CEO Mark Hurd has accepted an unusual co-president appointment at database giant Oracle, giving Oracle a tidy little stock boost in the process. (Hurd will also join Oracle's board of directors.) However, it isn't all good news: Hurd's former employer is suing both Hurd and Oracle, claiming that Hurd agreed to protect HP's trade secrets as part of his severance package, which is estimated to be valued at about $40 million.

"Hurd has put HP's most valuable trade secrets and confidential information in peril," the lawsuit reads. "In his new position, Hurd will be in a situation where he cannot perform his duties at Oracle without necessarily using and disclosing HP's trade secrets and confidential information to others ... Accordingly, HP seeks immediate injunctive relief to protect its trade secrets and confidential information from Hurd's threatened misappropriation ... and to require Hurd to honor his legally binding trade secret protection agreements with HP."

Oracle reacted with the expected faux outrage and a not-so-subtle threat. "Oracle has long viewed HP as an important partner," Oracle CEO Larry Ellison said. "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."

A longtime giant of the tech industry, Oracle has traditionally stuck to the database field. But in recent years, it has been expanding into non-traditional businesses and is starting to compete more with companies such as HP. It purchased Sun Microsystems for $7.4 billion earlier this year, for example—part of a broad trend of industry consolidation.

Hurd left HP abruptly and unexpectedly in early August, after an internal investigation into sexual misconduct turned up no evidence to the expected crime but did reveal evidence of minor expense violations. HP, an old-school company of a type rare in Silicon Valley, proceeded to remove Hurd for violating its code of business conduct instead. The reason? The HP board was upset that he had settled the sexual misconduct charge privately.

Legal experts are divided over the current charges leveled at Oracle and Hurd. California doesn't protect no-compete agreements, which is why HP went with the trade secrets charge instead. Some believe a settlement in which Oracle pays HP some form of compensation is the most likely outcome. No matter, for now we have the tech industry's version of the high-stakes soap opera. Just sit back and enjoy as it unfolds.

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