HP Faces Uphill Fight to Stop Hurd From Taking Oracle Position

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“Mark Hurd agreed to and signed agreements designed to protect H-P’s trade secrets and confidential information,” the Palo Alto company said in a statement. “H-P intends to enforce those agreements.”

But it won’t be easy, employment law experts said. “HP is facing an uphill climb,” said Cooley litigation partner Frederick Baron, who chairs the firm’s employment and labor practice. “California has a strong public policy against enforcing noncompete clauses.”

Although HP’s complaint (pdf) doesn’t say so explicitly, it relies on the doctrine of inevitable disclosure, the idea that taking a job at a Oracle would almost certainly lead Hurd to disclose his former company’s trade secrets.

“Hurd has put HP’s most valuable trade secrets and confidential information in peril,” the complaint said.

But California courts have rejected the inevitable disclosure doctrine. Last year, for example, the Second District Court of Appeal in Flir Systems v. Parrish upheld a trial court that found a trade secret misappropriation case was brought in bad faith because it was based on inevitable disclosure.

To have a stronger case, HP will have to prove that Hurd actually did something wrong and revealed trade secrets, not just allege that he might. “There has to be some kind of smoking-gun evidence,” said Tyler Paetkau, an employment law partner at Hartnett, Smith & Associates in Redwood City.

Without that evidence, it’s not likely the court will grant an injunction to stop Hurd from working at Oracle, said David Burtt, an employment law partner at Ongaro Burtt & Louderback in San Francisco.

“HP is trying to take Hurd out of his job in the absence of evidence of actual wrongdoing,” Burtt said. “If they had such evidence, they would have trumpeted it in the complaint.”

A court might feel comfortable granting a temporary injunction that would keep Hurd on the sidelines for a few months, Paetkau said.

“Then on the other hand, the court could say HP brought this on itself,” he said. “It could have handled the whole thing better.”

HP is represented by San Jose’s Allen Ruby; a team from Seyfarth Shaw that includes Michael Wexler in Chicago and Camille Olson and Robert Milligan in Los Angeles; and Robert Cooper and Samuel Liversidge in Gibson, Dunn & Crutcher’s Los Angeles office.