HP sues to stop ex-CEO Hurd joining Oracle

Mark Hurd, then President, CEO and chairman of Hewlett Packard, testifies during a hearing held by the U.S. House Energy and Commerce Committee investigating Hewlett-Packard on Capitol Hill in Washington in this September 28, 2006 file photo.

SAN FRANCISCO (Reuters) - Hewlett-Packard Co sued former Chief Executive Mark Hurd and asked a court to block him from joining Oracle Corp, saying his hiring by the rival technology firm puts HP's trade secrets "in peril."

Oracle, the world's third-largest software maker, named Hurd co-president and director on Monday, a month after he resigned from HP over expense account irregularities related to a female contractor.

Hurd's separation agreement from HP did not include a non-compete provision, which is generally unenforceable in California. But it did include a two-year confidentiality pact.

In a civil complaint filed in Superior Court in Santa Clara County on Tuesday, HP said: "In his new positions, Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing HP's trade secrets and confidential information to others."

HP said if Hurd is allowed to go to Oracle it would "give Oracle a strategic advantage as to where to allocate or not allocate resources and exploit the knowledge of HP's strengths and weaknesses."

Hurd "cannot separate out HP's trade secrets and confidential information in performing his daily duties at Oracle," the complaint said.

HP asked the court to block Hurd from holding a position with a competitor where it will be impossible from him to avoid disclosing sensitive information.

"Despite being paid millions of dollars in cash, stock and stock options in exchange for Hurd's agreements to protect HP's trade secrets and confidential information during his employment ... (HP) alleges that Hurd has put HP's most valuable trade secrets and confidential information in peril," HP's complaint said.

Hurd's compensation from HP was valued at nearly $100 million over the three years prior to his resignation, and his exit package was worth an estimated $34.6 million.

Oracle, the world's third-largest software maker, is an important partner of HP as well as a rival. Oracle competes with HP in the server market, following Oracle's $5.6 billion purchase of Sun Microsystems, which closed earlier this year. The company declined to comment on HP's suit on Tuesday.

Oracle shares surged 6 percent on Tuesday as investors cheered Hurd's appointment, which analysts generally praised as a boon for Oracle as it looks to make an impact in the hardware arena.

Hurd resigned from HP on Aug. 6. HP said he filed inaccurate expense reports related to Jodie Fisher, a marketing contractor who worked for Hurd's office from 2007 through 2009. Although Fisher leveled allegations of sexual harassment at Hurd, HP found no harassment had occurred.

Shares of HP closed 1.04 percent lower at $39.92 on the New York Stock Exchange. Shares of Oracle were up 5.87 percent at $24.27.

(Additional reporting by Yinka Adegoke and Bill Rigby; Editing by John Wallace and Richard Chang)

(For more news visit Reuters India)