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September 14, 2010

Is HP ¨Vindictive¨ or Right to Sue?


Mark Hurd continues to catalyze conflict. HP ousted Hurd amid allegations of sexual harassment. Now it is suing him for violating his non-compete agreement when he signed on with competitor Oracle. Oracle's Larry Ellison calls HP's lawsuit against its fired ex-chief ¨vindictive.¨ Who is right?


Mark V. Hurd's relationship with Jodie Fisher, a 50-year-old former reality show contestant and sometime soft porn actress, put an unsavory end to one of the great executive runs in recent U.S. business history.

Tripped over Fisher's allegations of sexual harassment, Hurd was forced to resign as CEO of Hewlett-Packard, the ¨patriarch of Silicon Valley companies¨ (New York Times). 

But HP's messy ouster of Hurd got even messier when Hurd agreed to work as a top executive at rising competitor Oracle. Now HP sued Hurd, and possibly Oracle, for implicitly violating a confidentiality clause he signed to get his $35 million-plus severance package. 

Oracle CEO Larry Ellison criticized HP's suit as a "vindictive" sabotage of the two companies' business partnership. Is HP really worried about Hurd's ¨threatened misappropriation of trade secrets," or is something else going on? Here are the possibilities:

One, HP is just trying to pester Hurd: The whole Hurd-HP-Oracle soap opera is puzzling, said Mike Masnick in Techdirt, but the most credible explanation is that HP's board ousted the thriving Hurd as payback for his investigating of the board in an earlier scandal. HP's almost-certain-to-fail lawsuit, then, is just an "incredibly childish" revenge tactic by the board.

Two, Ellison drove them to it: HP is right to be worried, said Robert Cyran in Reuters' BreakingViews. Oracle's hiring of Hurd is a deliberate, shrewd act of war by Ellison, a disciple of famed Chinese strategist Sun Tzu. HP is also right that Hurd's most valuable attribute to Oracle is his intimate knowledge of its business plans and clients. As Sun Tzu says, "know your enemy." Now Oracle does.

Three, Fight! Fight! Fight!: "If HP didn’t sue, that would have been a surprise," said Om Malik in GigaOm. So Hurd must have "an ace up his sleeve" to risk his $35 million settlement by joining Oracle. The Machiavellian theory for this lawsuit is that Ellison and Hurd were expecting it, and will let the legal hostilities distract HP until its business is in chaos. Whatever the cause, with a "fight this juicy" breaking out, "I am ready for the show!"
What do you think?
 Is HP right to sue Mark Hurd, and possibly Oracle? Or is the lawsuit childish and vindictive, and Oracle was entitled to hire Hurd? I look forward to reading your comments on my blog.

P.S. To invite your friends or colleagues into the conversation, click on the ¨Share¨ button above and/or retweet it. For tools on managing ethical dilemmas, check out my book The Rabbi and the CEO: The Ten Commandments for 21st Century Leaders.

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