What If Mark Hurd Had a Non-Compete in Texas


Key employees don't always have a non-compete or non-solicit agreement. You might, however, pay a high price for missing that detail.

Think about HP's predicament after ousting Mark Hurd from its CEO slot. Hurd turned around and took a senior executive role with Oracle which competes head-to-head with HP in several key markets. HP could only sue Hurd for breaching his non-disclosure agreement because he didn't sign a non-compete agreement. A copy of HP's complaint is posted on-line.

To win, HP must prove that Hurd has used or inevitably will use its business secrets. Assume for a second that the lawsuit was in Texas. Unless Hurd took confidential HP documents with him, that may be a hard sell.

Is that good enough? We're talking about an ex-CEO who, no doubt, got boatloads of business secrets. And he's now working for a direct competitor. According to HP, Hurd had been privy to a top secret report that analyzed HP's competitiveness against Oracle.

It's a different game with a non-compete or non-solicit agreement. HP would have Hurd in its crosshairs simply by proving that the non-compete was enforceable and reasonable. At least in Texas, state courts have made non-compete and non-solicit agreements far more enforceable since 2006. That's why many companies insist on them.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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