Hewlett-Packard Suing Hurd Over New Oracle Post (HPQ, ORCL)

It would appear, that the situation between Hewlett-Packard (NYSE: HPQ) and its former CEO Mark Hurd is far from over. This morning, Oracle (NASDAQ: ORCL) announced that it had hired Hurd as its co-president. Last month, HPQ fired the technology exec over expense account improprieties that related to a sexual harassment investigation.

This afternoon, Hewlett-Packard filed a lawsuit against Hurd in the Superior Court of California in Santa Clara which claims that he breached his contract with the company by accepting the senior position with Oracle (ORCL).

According to the suit, Hurd's intimate knowledge of HPQ and its trade secrets could be used to benefit Oracle at Hewlett-Packard's expense. The two Silicon Valley titans compete in the market for computer servers, storage systems and business software.

“In his new positions, Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing H.P.’s trade secrets and confidential information to others,” H.P. said in its lawsuit.

Oracle co-founder and Chief Executive Larry Ellison had criticized Hewlett-Packard's board for firing Hurd. In an email message, he called the firing “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”

Ellison clearly put his money where his mouth was by hiring Hurd, but the lawsuit may prove to be an obstacle to his plans. Investors, for one, are clearly very enthusiastic about Hurd's new role. During today's trading session, ORCL shares rallied 5.87% to $24.26 on the news.

HPQ on the other hand is well off of the levels it was trading at prior to the dismissal of Hurd. The stock closed Tuesday's trading session down 1.04% to $39.92. The shares were trading hands in the $46-$47 range before news of Hurd's ouster became public.