Hurd and Hewlett-Packard Settle
Topics: Legal Information
On September 7, 2010, Hewlett-Packard sued its former CEO for (1) Breach of Contract and (2) Threatened Misappropriation of Trade Secrets arising from the announcement of Hurd’s employment by Oracle on the 31rst day following the execution of a separation agreement with HP and a day or so after HP’s payment of over $12 million as a separation pay.
Many states have adopted a legal doctrine known as the “Inevitable Disclosure Doctrine,” which allows a trade secret owner to enjoin a former employee from working for a direct competitor despite the trade secret owner’s inability to prove actual or threatened misappropriation of trade secrets. The inevitable disclosure doctrine is based upon a demonstration that “the employee’s new job duties will inevitably cause the employee to rely upon knowledge of the former employer’s trade secrets.” See Whyte v. Schlage Lock Co., 101 Cal.App.4th 1443, 1446 (2002). However, California finds that the Inevitable Disclosure Doctrine would violate California’s public policy and act as a deterrent to freedom of competition.
Practitioner and Human Resource professionals hoping to learn about the viability of a “Threatened Misappropriation” claim in this context will not get the first take from the Hurd case. Indeed, reports of the settlement between Hurd and HP indicate that HP’s lawsuit has been dropped and Hurd has returned or agreed to return about half of the value of his severance package to HP.