HP Fightin Mad, Sues Hurd for Taking Oracle Job

About a month ago, Oracle Corp. CEO Larry Ellison notoriously lashed out at HP for firing his buddy Mark Hurd. (Hurd exited over an alleged infraction of HPs code of business conduct, as well as sexual harassment, and Ellison, in an e-mail, called the move the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”) So it was no surprise over the weekend that Oracle said it would hire Hurd as co-president, replacing sex-scandal-riddled Charles Phillips.

Reaction to the news varied. Investors loved the announcement, boosting Oracles market cap by yes, this is real $6.6 billion. But Hurds former employer didnt take kindly to the news and, on Monday, sued Hurd. HP said Hurd could share trade secrets with Oracle and damage HP, since the two companies compete for customers in the computer-server, data-storage systems and business-software markets.

Such suits, when execs move among firms in the same sector, are common. One of the most recent, and memorable, instances happened five years ago, when Mike Zafirovski agreed to take over as head of faltering Nortel Networks. Zafirovski stepped down as president and COO of Motorola Inc. and Motorola sued for breach of contract. Motorola and Zafirovski settled a few days later, and Motorola probably breathed a sigh of relief anyway as it watched Nortel, under Zafirovski, struggle to survive and, in January 2009, go bankrupt.

Since the HP-Hurd suit remains fresh, its hard to say whether itll go anywhere. More than likely, the two parties will settle. Reaching a settlement could prove tough, though. HP and Oracle are bitter rivals, and Oracle is known for crushing competitors without a second thought. The chances of the Ellison-led company capitulating to HP seem low.

Wall Street was keeping an eye on the two companies as trading neared its close for the day. At about 3:40 p.m. ET, shares of Oracle were 6.24 percent higher, reaching $24.35, while HP stock had fallen .94 percent to $39.96.

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