For the third time in two years, HP has filed a lawsuit to stop a former employee from going to work with Cisco – in one case, almost half a year after the employee had left HP in a voluntary reduction-in-force. 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.”
HP has a heritage as a proud California–based company. Bill Hewlett and Dave Packard built their world-class organization in the one state that won’t generally enforce employee non-compete clauses. In Silicon Valley, human capital is as mobile as financial capital. Employees’ freedom to find the best way to use their skills and advance their careers is a key factor that has driven the development of Silicon Valley. 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. Somehow, Bill Hewlett and Dave Packard didn’t see a need to build a company based on suing people who might want to leave. As HP has grown in states other than California, however, it’s tried to impose restrictions on employee mobility.
In the first of the three cases, 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 another case, 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 argument whatsoever that relevant intellectual property at stake. She persisted and HP relented. In the most recent case, just last week, the employee, who’d given HP over two decades of loyal service, had moved to California before starting work at Cisco. He asked a California court to declare that he was protected by California law and that HP could therefore not enforce its non-compete. A court hearing was scheduled in California, we notified HP and HP retained counsel. Cisco also reached out to senior legal staff at HP to try lay out some voluntary steps to avoid further litigation and to give further reassurance that the employee wouldn’t even inadvertently leverage any HP confidential information.
HP’s reply was to file an action in Texas against the employee and schedule an “emergency” hearing to try to enjoin the employee from working with Cisco, seeking to have a judge issue the injunction with no notice and no opportunity for the employee to be represented. Fortunately, an eagle-eyed Texas lawyer working for the employee saw the filing appear on- line and showed up in court. Given that the matter was already in front of a California court, with HP fully represented, in a hearing scheduled for two hours later, the judge in Texas was not impressed by HP’s effort to get her to act without a hearing. She refused to proceed. And the California judge issued an order allowing the employee to begin his new career at Cisco.
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.
Cisco’s promise to those looking to work in the networking industry is that no matter which of the fifty states you live in and work for Cisco, if you come to work for us we will apply California’s rule in favor of employee mobility nationwide. We know that employee retention is a matter of fair compensation and career opportunity, not litigation. And we challenge HP, with new leadership deeply steeped in Silicon Valley’s environment of mobility and opportunity, to step up and support employee freedom and stop suing employees just for leaving.