What if the Hewlett-Packard, Oracle, and Mark Hurd Suit was in New York?
HP has sued its former CEO to prevent him from working for a competitor, Oracle. HP filed its suit in California and California does not enforce non-compete agreements because that state views them as harmful to society. As such, HP is going to have a hard time stopping Mr. Hurd from working for Oracle. HP may be able to get some of the money or stock back that it paid to Mr. Hurd as part of his severance package, but I doubt HP will be able to stop Mr. Hurd from working for Oracle, not in California. The problem for HP is that if fired Mr. Hurd and now it wants to control what he does. That argument will not work in California.
If this case occurred in New York, the outcome would be different. New York will enforce non-compete agreements. If this was in New York, HP would have included an airtight non-compete clause and made that part of Mr. Hurd's severance package. If Mr. Hurd signed the document that contained the non-compete clause, then he would be held to it. If Mr. Hurd tried to work for a competitor, HP would file suit in the Southern District of New York and obtain an injunction and Mr. Hurd would not be working for Oracle.
But, if Mr. Hurd refused to sign a severance agreement that contained a non-compete clause, then the case could get messy. In NY, most large companies require key personal such as CEOs to sign non-competition and confidentiality agreements and these are enforced. But there is a line of cases in New York holding that non-competition agreements should not be enforced if the company fires with the employee without good cause. Since HP fired Mr. Hurd, there would be a dispute over these issues. Since Mr. Hurd apparently fabricated expense reports, a New York court is likely to find that he was fired for good cause and any preexisting non-compete agreement would be enforced so long as it's scope was reasonable.
My law firm has an office in New York City and in San Francisco, so we routinely deal with the laws of both states. They are different in many ways. California, in my view, is more progressive and protective of the individual while New York favors corporations over the individual. Mr. Hurd's is better off being in California.
