How is This Important for You? Lessons from the Mark Hurd / HP and Oracle Saga

You’re probably not (but then again, maybe you are) a senior manager getting fired from their job who leaves with a severance package valued at between $35-50 million.

But even if you’re not there are lessons for you to learn from the Mark-Hurd-Gets-Fired-From-HP-Gets-Hired-By-Oracle saga. Here’s what they are:

  • Employment laws that govern things like non-competition agreements are state by state. Like liquor and child adoption statues, the law in one state may not apply at all in another state. California, where Mark Hurd was employed, has a public policy stance that in almost all cases prohibits employers from preventing someone from taking their craft and skills to another employer via a non-compete. Some states – Illinois and New York come to mind – may have laws the generally enforce non-competes. HP – even after paying Hurd a chunk of change when he got whacked – stands little chance to prevent him from going to Oracle. As attorney Steven Hirschfeld noted, “To say they [HP] have an uphill battle would be an understatement.
  • There are ways to make it expensive for people to leave and compete with you. Severance agreements can be crafted so that competitors are named or sectors identified so that employees who leave and work for those companies or in those sectors within a specified period of time forfeit or pay back severance pay. It doesn’t even need to be onerous; a gardening leave , which is common in some industries, of 3-6 months makes most competitive information pretty stale.
  • There are more ways to make it expensive for people to leave and compete with you. Tactics like the following have been know to backfire (e.g.having people stay who you might prefer to leave, when they have offers from competitors) but another tactic is to include clawback language in stock option or restricted grant awards. The clawback in this case is that acceptance of the award stipulates some tolling period (think gardening leave again) prior to working with a named competitor or working in a sector.
  • Read the fine print. While everyone is generally chummy and friendly on the hiring front side, things (channel Mark Hurd here) can change. Negotiate an offer that you can live and leave with after your time is done. Candidates typically have the most leverage on hire – use it to reach a balanced understanding either in an offer letter, employment agreement if you have one, or in stock options or restricted stock grants.
  • More tears shed by answered prayers than unanswered ones” is a line from St. Teresa of Avila from the 1500’s. In still applies in the 21st century. While from Mark Hurd’s perspective it’s probably great that he’s found a new home with friend (and weekend tennis partner) Larry Ellison at Oracle, it’s my experience that quick rebound moves by senior execs are seldom without some peril. The roster of quick movers experiencing landmines includes former Apple CEO John Sculley (who moved to Spectrum Information Technologies), Ed Zander (who left Sun Micro to move to Microsoft and Motorola), and former Ford CFO John Devine (who jumped to Fluid Ventures before settling in with GM). Solution? Take reasonable time and do a fair amount of diligence. Just like rebound marriages, rebound jobs can have issues you don’t foresee.
  • Avoid leaping from the fire into the frying pan. Larry Ellison has been extraordinarily successful in building a business dynamo in Oracle but has not been described as a piece of cake as a boss. In the case for Mark Hurd, it’s an impressive list of highly regarded execs who have struggled under Ellison’s supervision; it includes Ray Lane, Gary Bloom and Tom Seibel. Hurd will be having a boss for the first time in years. In this case find out from folks who have left what it’s like to work for the new boss; if you don’t, any surprises are your responsibility, not his/hers.

That’s it. All lessons you can take away, whether you’re a CEO (or even if you never want to be) from Mark Hurd’s experience.

J. Mike Smith is a San Franciosco-based career, executive and team coach with an international practice. Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.

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