Hewlett Packard has sued its former CEO, Mark Hurd in a bid to stop his move to its rival, Oracle.
HP has justified the legal move on the grounds that Hurd's Oracle appointment breaches his exit agreement and could lead it some of its trade secrets being transferred, The Wall Street Journal reported.
The decision to sue Hurd may seem strange as HP has previously been criticised for ousting its CEO amid a sexual harassment investigation brought against him that he was later cleared of.
The lawsuit reportedly seeks an injunction against Hurd plus anonymous other people who are said to have helped broker the Oracle appointment. It also asks for damages.
The complaint is said to claim that Hurd "is violating and will continue to violate his legal obligations" by joining Oracle.
An HP spokesperson told the newspaper: "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements."
In a swipe at HP, Oracle's CEO Larry Ellison reportedly called the lawsuit ‘vindictive' and warned it could damage Oracle and HP's long-standing partnership.
He reportedly said that HP's board "is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees [and] is making it virtually impossible for Oracle and H-P to continue to cooperate."
Hurd departed HP last month with a hefty severance package of up to $35m depending on the firm's stock price, but his settlement did not include a noncompete clause, according to the paper.
Legal experts have reportedly said it is relatively unusual for an ex CEO to be sued, while a noncompete clause is generally hard to enforce in Californian courts so the case is expected to focus on the danger of trade secrets being disclosed to Oracle.
HP is beleived to have claimed that Hurd knows a lot of company information that could prove handy to Oracle, including future products, pricing information plus product and component costs.
The suit reportedly claims that Hurd "has put HP's most valuable trade secrets and confidential information in peril."
Update 4pm 08.09.10
Oracle has let it slip that Hurd will rake in an annual base salary of a cool $950,000 and could benefit from a bonus of up to $10m for this fiscal year, according to The Wall Street Journal.