Why Is HP Suing Hurd?

Includes: HPQ, ORCL
by: Felix Salmon

What on earth is the point of Hewlett-Packard (NYSE:HPQ) suing Mark Hurd? The mutual mudslinging has been decidedly unedifying to date, and now it’s certain to get much worse — and to take place in open court, to boot. With a market capitalization of over $90 billion, suing its former CEO certainly isn’t going to move the needle financially. And it’s going to take up a large amount of the valuable time not only of HP’s executives but of HP’s board members too.

I don’t know who made the decision to launch this lawsuit, but it looks very much like it was filed in a fit of passion after hearing that Hurd had signed on with Oracle (NYSE:ORCL). There’s no tactical or strategic rationale for this: it’s just petulance, really.

Does HP even have a chairman right now? It definitely needs one: a grown-up who can tell these people to put away their silly squabbles and concentrate on actually running their business. This lawsuit might be a distraction for Hurd, but it’s going to be much more of a distraction in HP’s executive suite. Basta. Please.

Update: The full suit (all 51 pages of it!) can be found here. On first glance, it’s pretty thin gruel. There’s nothing approaching a noncompete in Hurd’s separation agreement, and HP’s demands that HP be allowed to control all future actions of its ex-employee in perpetuity are simply laughable. It even wants a Special Master appointed “to provide a monthly verified statement of compliance that Defendents have not used or disclosed any of HP’s trade secrets and confidential information”. That kind of invasion, in the absence of any evidence that Hurd has actually done anything wrong, is downright unconstitutional, unless Hurd agreed to it as part of his separation agreement. Which he certainly did not.

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