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HP (HPQ, Fortune 500) doesn’t appear to have had an explicit non-compete clause in its employment contact with Hurd, who stepped down last month in the wake of a sex scandal. Such clauses are typically very hard to enforce in California, where Hurd lives and where both companies are based.
But it did have confidentiality agreements that Hurd signed annually, and the $12.2 million severance deal he struck requires him to continue abiding by those agreements. Those trade-secret “protective covenants,” quoted in HP’s lawsuit, require that for 12 months after leaving HP, Hurd refrain from “conflicting business activities” with HP rivals that would result in the disclosure of confidential information.
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Hurd’s confidentiality agreement also prohibits him from communicating on behalf of an HP rival with any HP customer he had business contact with in the past two years. But because of California’s employee-friendly non-compete rules, the deal has an exemption: As long as Hurd remains a California resident, he can have any contact he wants with customers that isn’t made with the “unauthorized assistance” of confidential HP information.
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Hurd’s insider access: HP’s lawsuit alleges that Hurd, along with the rest of HP’s board of directors, received a “highly competitive internal analysis of Oracle” in March. It noted that Hurd was in charge of developing strategic plans “to compete against HP’s competitors, including Oracle.”
HP’s complaint also blasted Hurd for “failure to provide notice of [his new position] before it was publicly announced by Oracle.”
I’ve had to sign non-disclosure agreements with most of my employers (and one time, a non-compete that was a *^&*^ to get out of.) I’m just a lowly engineer – but I checked the language of my current agreement – it talks about notifying my (current) employer if I take a job with a competitor… so it’s not surprising that Hurd had that restriction.
He may end up having to give up some of that parachute…
