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Break out the popcorn -- the battle over Mark Hurd is just beginning. Less than a day after the former Hewlett-Packard (NYSE: HPQ ) executive agreed to a deal to join Oracle (Nasdaq: ORCL ) as a co-president, HP filed a suit against the executive. While Hurd doesn't have a non-compete clause in his severance agreement with HP, there is a confidentiality agreement that prohibits disclosure of sensitive information.
Oracle was up nearly 6% today on news of Hurd's arrival. Should Oracle investors fear losing an experienced executive through subsequent legal tussles? Are we looking at a new era of rivalry between these Silicon Valley giants?
We asked three of our Foolish tech analysts to weigh in.
Rick Munarriz, Motley Fool Rule Breakers Analyst/Writer: Me-ow! I didn't think HP had this kind of catty and vindictive streak. If anything, I thought Hurd going to Oracle was actually doing HP a favor. He could have popped up as a high-ranking exec at Dell (Nasdaq: DELL ) or IBM (NYSE: IBM ) and really been a thorn to HP's future plans. How dangerous can he be to the HP he is leaving behind? Nobody cared much about what HP was doing before Hurd's arrival at the company. The way that HP's Slate tablet has gone through perpetual incarnations, it's safe to say that trade secrets and confidential information have already morphed since Hurd's exit.
Hurd reportedly didn't sign a non-compete clause as part of accepting his severance, so what's HP doing beyond drawing more attention to this summer's ugly episode? I figured the 3Par (NYSE: PAR ) purchase was just HP's decision to eat its way out of this. It cracked open the lid to the Ben & Jerry's Chunky Monkey, and would spoon its way to the bottom as a way to get over Hurd. Well, apparently it still has an "If I can't have him, nobody else will!" jealous streak that isn't going to play out well, especially because it was quick to push him out in the first place.
At what time does The Real Housewives of Palo Alto go on, again?
Tim Beyers, Rule Breakers Analyst/Writer: Sometimes, the Oracle haters have a point. This isn't one of those times.
An HP spokesperson told The Wall Street Journal that HP intends to "enforce" agreements designed to protect trade secrets. But that's silly. Sure, HP has trade secrets, but the company also had to know Hurd would have no trouble landing a job and that a competitor would likely make an offer. Despite this, HP made no move to insert a non-compete clause in Hurd's severance agreement, the Journal reports.
Realizing its mistake, HP is now demanding Hurd not do his best to compete with HP after being hired into a job where he'll be competing with HP. (Sigh.)
Don't get me wrong; I've no issue with confidentiality agreements. I've signed plenty of them. And HP does have the right to protect its trade secrets. But unless Hurd came into the Oracle job spilling his guts about major accounts, HP has no claim. This is no more than a tactic -- similar in scope and style to IBM's suing of Apple when it hired chip designer Mark Papermaster to oversee the project that became the A4 chip. As such, I'm not taking this suit seriously, and neither should any other Oracle investor.
Anders Bylund, Fool.com Writer: When HP's board decided to kick Mark Hurd out on the street, it must have known that he would seek employment elsewhere. Moreover, unless there was an actual non-compete clause in his contract you would have to assume that he'd go to one of HP's direct competitors. After all, the IBM wannabe that HP has become under Hurd's watch is in direct competition with every IT shop that matters. Finally, would you really expect a man you fired for essentially a lack of common sense to adopt some sort of honor code with regards to trade secrets?
If HP can actually enforce its confidentially agreement, Hurd is in trouble again. That would give Oracle an excuse for backing out of what I see as a terrible mistake -- Ellison should send HP a thank-you note when it's all over. And if not, then HP made a series of unfortunate mistakes and will suffer the consequences of giving away its trade secrets. Tough luck.
What do you think about this Silicon Valley saga? Share your thoughts in the comments box below.