Hewlett-Packard (H.P.) filed a lawsuit today in California state court, seeking to stop its former chief executive, Mark V. Hurd, from going to work for Oracle, its rival. Oracle announced yesterday that Hurd was joining the company as a co-president and director. The two companies compete in the computer server, business software and storage systems market.

H.P.'s lawsuit accuses Hurd of breach of contract and states that Hurd could use his knowledge of H.P. and its trade secrets in order to benefit his new company at the expense of H.P.

H.P. states in its lawsuit, "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."

Hurd resigned from H.P. a month ago, following an investigation into his relationship with a contractor. The contractor, a 50-year-old former actress, accused Hurd of sexual harassment. Although H.P. did not find any evidence of sexual harassment by Hurd, the board's investigation revealed questionable expense reports.

Company officials said Hurd authorized the contractor in question to be paid to attend social events with the company's top customers. Also, Hurd allegedly attempted to conceal his personal relationship with the contractor by removing her name from his meal expenses.

Hurd settled the sexual harassment claims with the contractor for an undisclosed sum. Although Hurd fought to keep the sexual harassment accusation private, H.P. decided to go public with the information. 

Lawrence J. Ellison, Oracle's chief executive, accused H.P.'s board of making "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

Source: The New York Times "H.P. Files Suit to Stop Hurd From Joining Oracle" 9/7/10