Should HP Have Sued Mark Hurd Under the Invevitable Disclosure Doctrine?

The commentary that I've observed so far suggests that HP's lawsuit in California against its former CEO, Mark Hurd, for joining Oracle in a president position is weak at best. (For background, here's a good article.) However, even if so, if I'm HP, then I would still be pursuing this action. That's because I can't think of a better set of facts for trying to protect trade secrets and other confidential information or intellectual property.

Here's why:

  • Hurd was terminated for conduct that goes to his judgment, handling of information and veracity. (He allegedly misrepresented or omitted information from his expense reports concerning his dealings with an attractive marketing consultant.)
  • Hurd presumably had access until just a few weeks ago to HP's most sensitive information including that concerning the markets and businesses with which it competes or will compete with Oracle.
  • Hurd's new position at Oracle seems very likely to involve the exact sames markets and businesses as those he oversaw at HP.
  • Hurd received millions and millions of dollars in compensation at HP, including as part of a generous severance package, and doesn't need this particular position or role to make a living.

HP's case has its challenges. Hurd, surprisingly, apparently is not subject to a non-compete covenant or similar restriction. California law typically errs on the side of protecting an individual's right to work in this context. It has not been alleged that Hurd has actually breached any confidentiality obligation he owes HP. And, Oracle and its chairman, Larry Ellison, are known to be tough negotiators and no doubt anticipated such a fight when they brought in Hurd.

That said, it is difficult to imagine ever having a stronger set of circumstances to present to a court for arguing that, at least for six or 12 months, an individual cannot possibly fulfill his or her duties without disclosing or using his previous employer's protected information. My guess is that HP's litigation efforts probably will result in delaying in Hurd's work or effectiveness for Oracle for a limited period of time. For example, whether by virtue of caution, settlement or court order, Hurd likely will have to limit the commencement or scope of his work.

The Chicago business lawyers of Jeremy A. Gibson & Associates, PC frequently advise companies and employees on confidentiality, trade secret and covenant not to compete issues. We are available to meet at offices in Chicago, Deerfield, Rosemont, Schaumburg and Oak Brook and elsewhere in Illinois. Contact us to schedule a consulation.