Bad pun aside, Hewlett-Packard has sued its former CEO, Mark Hurd, who left HP last month and reportedly just joined Oracle as its new co-president. (A copy of the complaint if available here.) Not surprisingly, HP is claiming that Hurd knows so much of HP’s confidential information that allowing him to work for Oracle – a direct competitor – would cause irreparable harm to HP.
This would be a textbook case for a court to consider enforcing a noncompete and/or nondisclosure agreement and even applying the inevitable disclosure doctrine (more on that here) were it not for the fact that the parties are located in California, which is notoriously hostile to noncompetition agreements, related restrictive covenants, and the inevitable disclosure doctrine. Indeed, in 2008, the Supreme Court of California issued its seminal decision of Edwards v. Arthur Andersen LLP, closing a loophole that had been opened and expanded by the United States District Courts in California, which had allowed the enforcement of noncompetes in certain circumstances.
That case, however, left open one narrow issue: whether noncompetes can be enforced to protect trade secrets. While other California cases have since addressed that issue, the California Supreme Court has not. This could be the case to do it.