Opinion: How Hurd's misstep became a big fat mess

9/8/2010 11:57 AM EDT

What would you do in this situation--and why?

9/8/2010 1:53 PM EDT

This kind of lawsuit never go anywhere. Remember when Microsoft sued Google over Kai-Fu Lee, the case was eventually settled.

9/8/2010 3:35 PM EDT

I agree that CEOs should be held to a higher standard, while I do not know the details of the indiscretions it seems that HP's board felt compelled to take action. I am less than supportive of the HP lawsuit preventing employment by Oracle. How could anyone expect to continue to work in their industry if they could not work for anyone else in their field of expertise? I might allowances for that high a position in a company as they would have access to strategic planning, etc.. If there were no constraints in his contract then there should not be a lawsuit, if there was then the lawsuit is justified. Seems open and shut to me.

9/8/2010 3:36 PM EDT

You can argue whether or not Hurd's firing was justified. You can also argue whether or not Oracle was wise to jump on him. But it is definitely unethical for Hurd to accept the new job and HP's golden parachute at the same time. He can take one or the other, but not both!

9/8/2010 3:43 PM EDT

I tend to agree with fundamentals. The purpose of the parachute is to compensate an executive during a "cooling off" period and give the firing company time to progress without endangering company security. In the least, Hurd should return the funds since he is going to be well compensated at Oracle, but at the same time, make sure he is not involved in anything related to the server business within Oracle.

9/8/2010 3:51 PM EDT

Larry's move is a stroke of brilliance! He is a true corporate warrior who swings a big sword unlike those who miss the opportunity to make landscape game changing progress. Larry is a street fighter as is Mark Hurd unlike those who stay warm in their corporate suites and happy to avoid controversy or become subject to criticism. Fair is for the Girl Scouts and does not have a place in corporate to corporate warfare. HP gave up the prized executive they had in the fold and cowered in the light of advice they solicited from an unqualified outside consultant. The HP board are not Big Dogs and should stay on the porch where they can bark without having to bite. They had their chance to be bold but feared what others might think of them. Larry did what was good and for Oracle without compromise.

9/8/2010 3:54 PM EDT

It all depends on what the employment contract states as to taking another job in the same industry. As to padding expense accounts, I do not know anyone VP level or above who does their own expense accounts - makes me think something else was amiss.

9/8/2010 4:12 PM EDT

I agree with "fundamentals".
It's a very primal move to try to stay with both lunch. One or the other, why be so greedy!?

This is an interesting news to follow... lets see how it unfolds. And it's true... engineers are also prevented from going to other companies.

9/8/2010 4:23 PM EDT

in a real world where employees ought to add value to a product line (rather than a fluctuating stock) one useless Hurd(le) is equal to 100 useful employees -- let there be jobs!

9/8/2010 5:14 PM EDT

Well, if you ask me, Hurd should have taken the golden parachute ($40M) he got from HP and gone fishing for awhile. I think Ellison is a bonehead to pull him in as a top exec at Oracle right now, even if it otherwise would be the best business choice. The uncertainties this is causing won't do either company any good, and it certainly puts Hurd's ethics in further doubt.

9/8/2010 5:23 PM EDT

As patk0317 points out it's highly unlikely Hurd was spending time filling out expense reports. IMO it is also not why he was fired. This was a scape goat for something else. Should be a juicy story here somewhere?? Obviously someone wanted him out.

9/8/2010 6:07 PM EDT

I am with bpa1.

Of course, the falsification of the expense reports can't be the real reason for Hurd getting fired. It's either the HP board didn't want to see more details coming out of the scandal (original lawsuit against Hurd by "that" woman) or there was something else the board didn't like about Hurd. Well, that's just my speculation.

What I am really interested in finding out, though, is the role that a corporate board is supposed to play.

Is it my imagination that HP's board seems to get tangled up in different scandals more often than other corporate boards?

There was Walter Hewlett's proxiy fight against Carly Fiorina (for a controversial merger with Compaq); Fiorina's dogged hunt for board room leaks; HP's spying scandal; and now this with Hurd.

What does this tell you about HP's board?

And what roles should a corporate board play?

9/8/2010 6:30 PM EDT

I believe what most people are overlooking "IS" HP's board performance. Then and now, former and current members have demonstrated incompetence, poor decision making and in general an amateurish display of letting situations get out of hand rather than managed. This includes the acquisition price most recently for 3PAR. Bobbing, weaving avoiding blame hoping to avoid making a decision which they could be held accountable for. Hence, they let things drift to levels which are shameful. Another reason they wanted to get rid of Hurd is because he's a strong, have it together executive who is not afraid to tell you where the dog crapped. Hurd is a alpha dog that is not going to sail off into the sunset because he has a few big bucks. For him that's not what the game is about. Neither is it for Larry. You don't see these kinds of episodic events with solid and competent corporate boards because they are staffed with cohesive business leaders.

9/8/2010 8:05 PM EDT

A clear cover-up to something much more sordid I would say. As for Oracle's hiring of Hurd, I would be surprised if there was no clause in his contract with HP preventing him from working for a competitor for a while.

9/8/2010 8:20 PM EDT

The HP board made this whole affair look like amateur hour.

When you get part of a story, then the company appears to contradict itself and adds additional information to cover themselves, credibility is shot.

When you accuse a CEO of something illegal/unethical, you had BETTER have the story you release clear and straight. And airtight. HR, PR, and Legal need to be in line.

I am a shareholder and mad as hell about the HP board. This is not their first screw up. Other shareholders are voting with their feet.

9/9/2010 12:33 AM EDT

It would probably have cooled off if Larry didn't make that gaffe about them being "Idiots"; may be they were but you don't tell it on their face when they are already hurting. One thing leads to another and before you know it starts to look nasty or juicy depending on who you are.
HP's lawsuit is just more like crying foul than based on any real merit. But yeah, Hurd is eating double lunch.

9/9/2010 12:53 AM EDT

I think that the fear of HP's intellectual property being at risk is very real. Hurd held a position where he would have access to product development plan, financial plans etc. that are without a doubt confidential. The purpose of the golden parachute is to guarantee that the person remains a "free agent" for a prescribed time. When the time expires, products that were in development are usually already released and financial data would no longer be of value to a competitor. I believe HP's board has the responsibility to challenge anything that would risk this down time. They have a responsibility to the stockholders and employees to do everything in their power to limit any damage to HP. I'm not saying that Hurd would actually release confidential information to Oracle but it would be difficult to be effective with blinders on. HP's board made the decision to release him, for whatever reason, and now they bear the responsibility for protecting the interests of the company.

9/9/2010 1:12 AM EDT

It all depends on how they interpret the statements in the contract. Maybe Hurd's is barred for a certain period from working with competitors. Anyway, prevent a free work force (since they sacked him) from working with your competitor is an act of non competitive. It hurt the industry as a whole in long term.

9/9/2010 2:33 AM EDT

My understanding about these non-compete contracts is that they only apply to voluntary departures, such as being lured to another company. When you are fired, no holds are barred. The only glitch would be if the golden parachute specifies non-compete and PAYS him to not work for competitors. BTW, my understanding is that his check is NOT in the bank yet, so maybe HP just wants to avoid paying him the giant parachute.

9/9/2010 3:12 AM EDT

Non-compete covenants not valid in California, there should be no case for the suit.

9/9/2010 8:43 AM EDT

I don't want him but you can't have him either...... pathetic............

9/9/2010 9:07 AM EDT

Hmmm, nobody mentioned that it was recently reported that HP had to pay $55M to US Gov't for illicit kick-backs. Might this have influenced the board in their decision?

Hardly the "HP Way", is it?

9/9/2010 11:03 AM EDT

Could somebody please explain why HP is suing Oracle? Hurd signed the non-rival work agreement, not Oracle. Seriously, now. Could some explain this lateral diffusion of liability?

9/9/2010 2:56 PM EDT

America is the Orwell's Animal Farm. All men are not created equal. Small boys will have problems getting jobs after this small mess, but a big fish like Hurd gets a parachute and another parachute. Do not worry, the people that run this world see us differently.

9/10/2010 12:55 AM EDT

GoAfrit, you are being quite funny over there...I like the idea of Orwell’s Animal Farm!

The grounds on which Oracle can be sued is a mystery to me as well. Can someone please explain how a third-party can be held responsible for a violation of contract terms performed by the immediate 2nd party to the contract? It had better be a worth-while explanation to this. Otherwise, HP will slide down even lower.....first their CEO missed one step, now the entire board is rolling down the stairway!

On Oracles point of view, however, I see it as a shrewd business move that they have made. Ethical dilemmas aside, Hurd should be a good colour-match for Larry Ellison in the server game. Guess, we would get to see the two alpha-dogs sit side-by-side around the Oracles’ board tables for some time to come, don’t you guys think?

9/10/2010 10:59 PM EDT

Hurd should take a year off, hike Alps or sail around Caribbean (I don't know whether he hikes or sails, this is just an example)...Oracles's offer and Hurd's acceptance is another not so clean act in this high-tech little drama...Kris

9/11/2010 8:45 AM EDT

Give Ellison and Hurd credit for speed and boldness. Hurd is already listed as the main keynoter at OracleWorld on Sept. 20. Perhpas he can just reuse some HP slides ;-)

See http://www.oracle.com/us/openworld/keynotes-143370.html

9/13/2010 2:52 PM EDT

I'm not a lawyer but I know that California Business and Professions Code section 16600 is clear:

"Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."

The exceptions deal with the breakups of limited liability corporations and partnerships. It does not address the issue of confidentiality agreements, only that you can't be restrained from taking another job.

HP I presume is suing Oracle over the potential (or future real) disclosure of confidential and trade secrets of HP that Hurd can't avoid disclosing in the employment as the President.