Last summer, former Hewlett-Packard Co. chief executive officer Mark Hurd resigned as accused of violating the company's sexual harassment policy and misusing company assets in attempting to cover up that violation. Although HP ultimately found that Hurd did not, in fact, violate his harassment policy, Hurd resigned from his position. Now, at least two HP shareholders have filed employment lawsuits against the California company, claiming that Hurd's admitted wrongdoing should have rendered him ineligible to receive his multi-million dollar severance package.

Allegedly, Hurd had a relationship with an HP contract employee, who later brought sexual harassment allegations with him. After an internal investigation, HP found that no the contractor was not sexually harassed, but that she did receive inappropriate payments from the company during her two-year tenure as a contractor.

One of the two employment lawsuits filed against HP, brought by shareholder Ernesto Espinoza, claims that Hurd could have been fired based on his admitted misuse of company assets, and, therefore, that he should not have received his severance package. "Admitting that he violated company policy and recognizing that he misused company assets, conduct that was not in the best interest of an injurious to HP," Espinoza's lawsuit said. Under HP's severance plan for executive officers, the lawsuit claims, termination for cause is based on whether conduct is "in the best interest of, or is injurious to HP".

Therefore, the lawsuit claims, "the board appeared to have more than sufficient bases to terminate Hurd for cause under the severance plan," rendering Hurd ineligible for the severance package which is estimated to add up to as much as $50 million.

Source: Bloomberg, "HP Could Have Fired Ex-Chief Hurd, Investor Says in Lawsuit", Sophia Pearson and Jef Feeley, 15 January 2011