Oracle Says Mark Hurd Does Not Beat His Dog: An Ethical Issue

Mark Hurd does not beat his dog. He did not sexually harass a Hewlett-Packard (NYSE: HPQ) contractor. He would never disclose HP trade secrets to his new employer Oracle (NASDAQ: ORCL) despite the fact that he has secrets he could disclose. In short, he is a man of honor. None of that gets to the heart of the dispute between HP on the one side and Hurd and Oracle on the other. Hurd signed a piece of paper about trade secrets. The paper may not hold up in court, but Hurd undertook an ethical obligation when he signed it and that has been lost in the rhetoric of whether it is proper for him to serve as co-president of Oracle.

The fact that Hurd said he would honor his obligations did not keep HP from suing for assurances that he would not share any of the important knowledge from the company he ran with the company where he works now.

Oracle CEO and founder Larry Ellison took issue with the HP board of directors when they let Hurd go. The suit about trade secrets has made him even more angry and he has started to make threats. Ellison owns over 20% of Oracle, and is extraordinarily rich.  He can do as he pleases at the company where he has been CEO since 1977.

“Oracle has long viewed HP as an important partner,” said Oracle CEO Larry Ellison. “By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees.   The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace.”

The HP board already knows that to place meaningful restrictions on Hurd would mean an uphill fight against the California employment laws. And, now the board has trebled its mistake by putting its battle with Hurd in the place of its long-term relationship with a strategic partner. The board has not made a point of the ethical issues around Hurd’s obligations because they are not a part of the legal issues that surround his departure from HP followed by his acceptance of a new job at Oracle.

There is some real irony that a man who was accused of a fudge here and there of his expenses and a possibly inappropriate relationship with an HP contractor should move to a competitor and inevitably take his knowledge about his former employer with him. While it may not hold up in court, Hurd will certainly use his background at HP to aid him in his new work. That is inevitable. It is a matter of memory couple with his competitive nature, and perhaps a urge to get even with HP for unceremoniously dumping him.

Hurd’s pledge is a pledge nonetheless, but he appears to give not a whit about it.

Douglas A. McIntyre