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HP Sues Employees for Leaving – We Challenge HP to Support Employee Freedom

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.

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49 Comments.


  1. Awesome article

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  2. Are you serious? If you see them using the trade secrets that I understand, but suing because you’re scared they’re going to? It’s quite ridiculous in my opinion.

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    • Great article – it is very sad to see how HP handles such situation. Reputation is an intangible asset – how much can HP afford losing? As one of their marketing strategies goes “good enough”, perhaps it should be “enough is enough” and it’s time to stop?

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  3. Suing your employees is not the way to go. With great power, comes great responsibility. This also doesn’t send the right message out to fellow employees.

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  4. HP has provided a clear roadmap to:

    1) How to be incredibly unprofessional
    2) How to negatively impact recruitment and retention
    3) How to de-moralize your existing staff
    4) How to run scared in the face of competition
    5) How NOT to run a company.

    Unbelievable.

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  5. They did the dame to me in NXP, blocked me moving to a consulting services company that they said had too strong ties to IBM. I caved as i couldn’t afford such a legal fight, but when Mark Hurd (ex CEO of HP who left under dubios clouds) and went to Oracle!!!! I told them to go stuff them selves and let’s see then sue me after that precident :)

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  6. John Earnhardt

    The Wall Street Journal Law Blog covers Mark’s blog here: http://blogs.wsj.com/law/2011/11/23/cisco-to-h-p-stop-suing-your-ex-employees/

    The WSJ writes: “Chandler (states) rival Hewlett-Packard should stop suing to block former employees from taking jobs at Cisco. Chandler, a rare general counsel who often freely speaks his mind, described such efforts as “desperate moves” by a company beset by “the chaos of executive turnover.””

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  7. I know a few cisco colleagues, who have decided to leave cisco to join HP. I didn’t hear any horror story about cisco threatening to sue them. Two companies, two cultures ;-)

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  8. HP, desde que surgiram boatos sobre o fechamento da empresa que os funcionarios precisam de liberdade, e garantias da companhia.

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  9. Hi Mark
    What’s your view on employee non-compete clauses outside the US (where they are probably enforceable)?
    Thanks
    Jonathan

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  10. You need to get your own house in order first. You should not using law enforcement to attempt to muzzle folks suing you. Justice McKinnon has found that cisco abused and prodded law enforcement in a civil matter. Why would you have someone arrested during a deposition? If that’s not intimidation I don’t know what is.

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    • Mark Chandler

      Adekeye is under federal indictment for crimes he is alleged to have committed. Your complaint about his arrest should be with federal authorities in Canada and the US, if you have one. I am proud that we cooperate with the authorities when we believe crimes have been committed – some institutions sweep these things under the rug. You choose a strange object for your sympathy, comparing a man under indictment by US authorities for theft, and who refuses to face those charges, with employees who are being pursued to keep them from practicing their professions.

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  11. Google “Peter Alfred-Adekeye.” Now THAT’S ironic. Hard to claim the high road here…

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  12. Excellent blog entry Mark. Keep up up the public awareness campaign with HP. When their stock eventually reaches $2 and talented people refuse to work there anymore, their Board might actually get a clue and really clean house.

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  13. I am involved in recruitment services and I know how nasty this kind of situation can become. Our company work with LG and Samsung in Europe and we have strict policy that we can’t interview people from one company so they could become new employee to second. If we send CV and there is smallest sign that this new guy have worked for other company, even if it was while he was in practice he will be refused.
    It is fair game as employees can know too much about the inside of company and can fight against it.

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  14. HP and some other companies, even BPO, they are using this method to their ensure trade secrets will not be shared..threat of lawsuit..tsk

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  15. In today’s world when employers are trying hard to build “Best Employers” brand image by spending millions in advertising, this act of pressurizing employees is certainly going to deteriorate their image.

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  16. very nice post…super wonderfull blog…

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  17. Well, seems that HP is going for the Be A Jerk prize… I mean… HOW can you sue someone just because he doesn’t want to work for you anymore?

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  18. good post. very helpful.
    Thanks

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  19. I believe, suing your employees also creates disturbance in fellow employees.

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  20. Non-competes are harsh, especially on trade secrets. Don’t sign one, if its especially long. They aren’t hard to get enforced especially since no harm has to be shown, just the potential for harm (at least in Missouri).

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  21. HP used to be considered a good company to work for. My former husband happily headed up their corporate storage division for many years until they began forgetting that the employees made them respected and profitable. When every day became an exercise in stupidity that adversely affected productivity and corporate culture was defined by fear and insecurity, he retired and joined many thousands of others in the brain drain. It’s no surprise to see the financial figures reflecting this drain and no legal actions including restrictive non-disclosure/non competes will stem the flow of the lifeblood.

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  22. Having come from a 15+ year career in software quality assurance, this article caught my eye…where I subsequently laughed my butt off.

    First, let’s talk about the reason I started my own business in the first place: Outsourcing. Twice in a decade, I suffered a job loss (due to a declining market) where all or most of the QA team was shipped overseas to save a company money. In each case, no severance was given…just a pink slip.

    Is HP kidding with this proactive suit approach?!?! Look if an NDA says you cannot work for a competitor within a year of employment termination, that’s one thing. But to sue an ex-employee for quitting in general (or in a voluntary workforce reduction situation), that is truly laughable.

    What’s next for US employees…will they have to move into their work facilities and divorce from their spouses as part of their employment contracts?

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  23. This article makes me sigh, the litigious knife cuts both ways, and everybody bleeds.

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  24. Indeed Wrestlers. I never thought I would see the day where I’d be advising clients to take out an umbrella policy because they are employed! LOL

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  25. I don’t really understand what happened with HP and employee. I’m from Indonesia, I heard about the HP problem with their employee from my local news. I do agree with you mark, the employee must has their own choice. Freedom is good, but there must be clear about what’s the meaning of “freedom”.

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  26. Good note mark. As a former Digital Equipment employee for 18 years in New England I know of friends who ended up at HP and we continue to discuss from a culture standpoint “HP ain’t DEC.”

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  27. Great Article Mark. I was an HP employee prior to joining Cisco in 2000. It is very sad to see how desperate a once great company as HP has become and how little regard they appear to have for their employee’s career aspirations. I remain very glad that I decided to leave HP for Cisco eleven years ago.

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  28. Well done, and thank you for candid opinion-sharing on the poor tactics used by HP.

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  29. Excellent post Mark!
    I greatly appreciate your straight talk on this and other issues.
    Keep up the great work.
    .Burt

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  30. The devil is always in the detail.

    While I would agree with Mark’s post on the surface I note the scant detail on the three cases mentioned. I imagine with an employee base the size of HP’s the amount of employee churn would greaterly exceed the amount they would focus litigation on.

    It would be fun to get HP to provide a comment here although I doubt we would see much in the way of fact coming out.

    Certainly an interesting post.

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  31. Excellent post Mark. It is very disturbing to learn of such practices by HP, and it takes a lot of courage to expose them as you have.

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  32. Great article, Mark.

    HP used to be a role model for how to propagate a positive culture. When my wife started working there in the early 90s, employee turnover was so low, that people never asked her what company she came from, they asked her, “What HP division did you come from?” Today’s HP has sadly lost all of the things that made “The HP Way” something to respect and emulate.

    Brett

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  33. Great post, Mark.

    I worked for HP in the eighties, and I was quite impressed with the respect and care HP had for their employees (“the HP Way”was not just a nice document, it was their way of working).
    Nowadays little seems to be left of the HP Way.

    Theo

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  34. Thank you, Mark.

    It is great and refreshing to see Cisco take such a candid and public position on a sensitive matter that directly affects real people. This really exemplifies the leadership of a large company that has the guts to demonstrate courage rather than be silent in a controversy.

    Keep it up!

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  35. Waiting to see HP’s sad legal thrashings show up as a thread in Dilbert cartoons. Along with the ‘accounting trolls’ maybe we can now expect to see the ‘litigation lampreys’.

    Really though, it seems that HP by their actions are demonstrating a cultural concept that they expect escaped minions will turn their IP against them. Does that perhaps imply that in the reverse they would expect to glean competitive IP from any Cisco employees they manage to poach (as if)?

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  36. I am SOOOOOOOOOOO glad I work for Cisco!

    Great article.

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  37. We currently live in economics times of chronically high unemployment. USA tech jobs are being sent off-shore in record numbers. Yet companies, such as HP, seem to think it is OK to deny people the right to work.

    The best that HP can do is hope that their trade secrets are not released, and if they are, THEN take legal action. HP’s actions sounds more like a real-life “Minority Report”.

    If there was no non-complete contract, then HP is just creating hardship for former employees who obviously do not have the legal bench that a multi-billion Dollar global corp has at its disposal and the deep pockets to hire a strong defense.

    I just find it appalling this is the shape of tech to come.

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  38. This should be in the WSJ, Bloomberg TV, and other Financial News outlets. This is unacceptable behavior by any company. Shame on HP. I feel sorry for their employees and I hope more of them realize the grass IS greener. It is a shame that HP killed the great Compaq culture of yester-year.

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  39. Nice post. It is bad on part of HP to sue their own employees. Firstly, HP should check why their staff plans to leave them. It seems something is wrong in HP and they are not able to retain them. But if they are leaving, HP should not create bottlenecks in their path.

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  40. Great read Mark.

    This behaviour is unfortunately not restricted to the US. There is anecdotal evidence to suggest that this is the approach being adopted in other jurisdictions as well. Seems this is the “new HP way”.

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  41. Could not agree more. Reason for innovation booms in the Silicon Valley — cross-pollination spurred by modest restraints on employment moves stimulating healthy competition.

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  42. Thank you, Mark. Good post. Very helpful.

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  43. I knew Paul very well. HP Storage is now run by goons, used car salesmen and empy suits. It’s is a hell hole to work at. D square is behind it all. Where is the board again? D square has already destroyed most of it – why are they standing idle again?

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  44. Whatever happened to providing a respectful environment where people want to wake up and go to everyday? Sounds a bit medieval…

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  45. I know a thing. If you have secrets that you don’t want the competitor to know them, you keep the ones that know your secrets close.

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  46. Unbelievable. Great article.

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  47. Everyone should be aware that HP does not honor it warranties and that it thinks cheating people is the best way to do business. As a Disabled Vietnam Veteran, I am extremely disappointed that HP would take unfair advantage of those of us that served our county with honor. I will never buy another HP product and I hope many others will join in boycotting this un-American company that is run by criminals.

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