Cisco tells HP to lose that suit

Chastises company for trying to block ex-employees jumping to rivals

HP should stop suing employees that jump ship for HP competitors. That's the viewpoint of Cisco, anyway, after HP sued a few former employees for going to work there.

In a blog on its site last Wednesday, Cisco challenged HP to cease litigation against employees who leave the company to work elsewhere. The latest episode - and the third in the last two years, according to Cisco - was two weeks ago, when an employee who had worked at HP for two decades moved to California to join Cisco.

The employee asked a California court to declare that he was protected by California law from HP enforcing a non-compete against him, thereby blocking his employment by Cisco. A court hearing was scheduled and Cisco also contacted senior legal staff at HP to try to negotiate a voluntary plan to avoid further litigation and assure that the employee wouldn't violate any HP confidential information, according to the blog, authored by Cisco General Counsel Mark Chandler.

HP's reply was to file an action in Texas and to schedule an "emergency" hearing to try to block the employee from joining Cisco. HP sought to have a judge issue the injunction with no notice and no opportunity for the employee to be represented, according to Chandler's blog. The Texas judge refused to proceed and the California court allowed the employee to begin working Cisco.

Wrote Chandler:

It's a sad day when great companies think they need to sue their own employees over and over again to stop them from bettering themselves in their chosen profession. Some states allow this. No company is forced to take advantage of it. Ironically, HP itself, when it recently hired an IBM employee who was under non-compete, argued that protection of intellectual property should be the only goal and the non-compete should be invalidated.

The employee at the center of the latest dispute is Paul Perez, former chief technologist for HP's StorageWorks unit. Cisco confirmed this for The Wall Street Journal.

In the other two cases of HP pursuing former employees who left to work for Cisco, one was a worker who retired from HP months before talking to Cisco, Chandler reports:

HP was so persistent in the litigation and so threatening, that the individual, who had retired from HP months before even talking to Cisco, withdrew. There seemed to be little concern with the stress that a big company turning its legal guns on an individual can cause.

In the second, an employee who worked in HP's financial services group was sued to block her from working in Cisco's customer finance group even though there was no relevant intellectual property at stake. She persisted and HP relented, Chandler blogs.

These, and the Perez case, won't likely be the last as HP grapples with a top management makeover, Chandler predicts:

As headhunters and other companies are flooded with resumes from HP employees seeking safe ground amidst the chaos of executive turnover, we can probably expect to see more desperate moves to lock up human capital. In an unhappy work environment, it's a strange decision to try to achieve employee retention by litigation. And it can't help recruitment efforts when it seems the corporate slogan could be changed from "HP Invent" to "HP Sue."

And Chandler notes that in Silicon Valley, "human capital is as mobile as financial capital":

Trade secrets are protected by intellectual property laws, not by non-compete agreements and vague theories that a new job would "inevitably" cause an employee to use trade secrets of his or her former employer.

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