Oracle's Hiring Of Ex-HP Chief Creates Drama On Monday, the ousted chief executive of Hewlett-Packard was named co-president of rival Oracle. Mark Hurd, who helped revive a struggling HP, was forced out earlier this year after a scandal involving expense reports and a female contractor. On Tuesday, HP sued to prevent Hurd's move to Oracle, arguing he could reveal trade secrets. Melissa Block talks with Wall Street Journal reporter Ben Worthen about the case.
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Oracle's Hiring Of Ex-HP Chief Creates Drama

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Oracle's Hiring Of Ex-HP Chief Creates Drama

Oracle's Hiring Of Ex-HP Chief Creates Drama

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

All this week, a corporate soap opera has been playing out in Silicon Valley. On Monday, the ousted chief executive of Hewlett-Packard was named co-president of HP's rival, Oracle. Mark Hurd helped revitalize a struggle HP, but he was forced out last month after a company investigation found he had tried to conceal a personal relationship with a former HP contractor.

And the drama doesn't end there. On Tuesday, HP filed suit against Mark Hurd, charging that by joining Oracle, he's violating his severance agreement and will reveal HP trade secrets.

Ben Worthen has been covering the story for The Wall Street Journal. He joins us now from San Francisco. Welcome to the program.

Mr. BEN WORTHEN (Reporter, The Wall Street Journal): Thank you for having me.

BLOCK: And Ben, a lot of high drama here. What's the latest on this lawsuit and the fight over Mark Hurd?

Mr. WORTHEN: Well, the latest is that Mark Hurd is currently working at Oracle. But as you said, there's a lawsuit filed by HP that's going to try to get it so that he can't work there.

What they're arguing is that he was so close and so involved in every aspect of HP's decision making that just by definition and by having all that knowledge in his head, it's going to be anti-competitive to HP for him to work at one of their rivals.

BLOCK: Well, what would these trade secrets be that they're worried that he would bring to Oracle?

Mr. WORTHEN: Well, Mark Hurd, as the CEO of HP, was involved in every aspect of the business. He set their strategy moving forward. He also had intimate knowledge of how much it costs for them to make each of their products, how much more they make by selling it. He knows how much each component costs. He knows the relationships with all the suppliers and he knows, you know, what each iteration of the products are going to be moving forward, as well.

BLOCK: And when you talk to legal experts about this, do they think HP has a case? Could they win this?

Mr. WORTHEN: It's going to be tough. In California there's - non-compete agreements are typically difficult to enforce. You know, basically the state says that if you're an employee, you can go to work somewhere else. And, in fact, Mark Hurd didn't have a non-compete agreement. What he had was a confidentiality clause. And what HP is arguing is this idea that he's going to be breaching that confidence by working for the rival.

The legal experts I've talked to say that these suits don't really have much of a chance. And, in fact, typically when employees go to work at one tech company having left another, sometimes there are these lawsuits. And typically, nothing really comes of them.

The one chance that HP does have is that this isn't some midlevel employee going to work for a rival. This is their chief executive and he's taking the president job at one of their rivals. And so it's a little different.

BLOCK: Right. This is the very top of the top.

Mr. WORTHEN: Exactly.

BLOCK: Ben, help us understand a bit how these two companies, HP and Oracle, relate in the marketplace.

Mr. WORTHEN: Not that long ago they each had pretty defined roles. Oracle sold software to businesses. And HP made the equipment that they used in their data centers as well as the personal computers. In January, however, Oracle bought Sun Microsystems, which makes the same server systems, the storage systems that HP sells to businesses. Sun was struggling, but it was well known for having good technology.

Now, at Oracle, they didn't really have a lot of expertise for running one of these hardware businesses, and Mark Hurd has done a phenomenal job doing just that at HP. He took that company and he made it into the world's largest technology company by revenue and the largest seller of these systems.

So, you know, he's known as a strong operator, someone who can cut costs and make businesses more efficient. And he's going to be expected to come into Oracle and turn that Sun business around and really make it a competitor with HP.

BLOCK: And the story surrounding Mark Hurd gets pretty colorful also because of the Oracle CEO Larry Ellison, who hired Mark Hurd away. Why don't you tell us about him and what he's known for.

Mr. WORTHEN: Yeah, Larry Ellison is one of the most outspoken people in the tech industry. He's always said exactly what's on his mind rather than the polite thing to say in any situation.

For instance, as soon as HP ousted Mark Hurd, Larry Ellison very quickly came to his defense, calling it the worst decision since Apple's board decided to fire Steve Jobs years and years ago.

Now, in the background, Ellison and Hurd are actually close friends. They play tennis together from time to time. And so this is really going to be an opportunity for these guys to work together instead of, I suppose, just playing tennis.

BLOCK: Okay. I've been talking with Wall Street Journal reporter Ben Worthen. Ben, thanks so much.

Mr. WORTHEN: Thank you.

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