THE BLOG
09/09/2010 01:30 pm ET Updated May 25, 2011

Mark Hurd Just Wants to Be Free

Everyone talks about how information just wants to be free. What about us? The lifeblood of innovation and technology in California has always been fed by a simple but fundamental premise that is all too often lacking in other states and countries. We are not slaves or modern versions of indentured servants, and no matter what a company pressures you to sign you are free to take your brain and spirit and apply it at another company.

The fascinating case of Mark Hurd has brought this principle into sharp relief. Hurd is the CEO who ran afoul of the Hewlett Packard principle known as the HP code.

Until this summer, Hurd was the executive who brought the company back from the Carly Fiorina years. Though some critics bemoaned severe cuts in R&D and staff, Hurd made HP a leader in desktop and computer sales. Then came an allegation of sexual harassment. HP's board launched an independent investigation and found that, while he had not violated the firm's sexual harassment policies, Hurd had allegedly fudged some expense reports.

The lapse in judgment appeared relatively minor, involving about $20,000. Hurd agreed to pay back the money. But by then his relationship with his employer had soured. Some members of HP's board seem to have been offended that Hurd's lawyers reached a private settlement with the woman.

The HP Code had been broken, and so Mark Hurd was fired.

In another country, or perhaps another state, that might have been the end of the road for Mark Hurd. But this is California, the engine of innovation and high tech in America, if not the world. Larry Ellison promptly blasted HP in a letter released to news organizations: "The HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago," he wrote. "That decision nearly destroyed Apple -- and would have, if Steve hadn't come back and saved them."

This week Ellison followed that verbal lashing with a shot to the gut. The maverick billionaire hired Mark Hurd. Oracle's stock leaped nearly 6 % in a day -- raising the firm's market capitalization by $6.72 billion. In an instant, Hurd went from a fallen man to a much richer man with a bright future. Oracle's new co-president will earn an annual base salary of $950,000 and be eligible for a first year $10 million bonus, not to mention 10 million stock options, which could be worth a quarter of a billion dollars. But then his former employer weighed in.

Mark Hurd was sued.

HP charged in a legal complaint that Hurd "is violating and will continue to violate his legal obligations" as a result of his Oracle hiring. An HP spokesman has said that the firm intends to enforce the trade secret and confidential information that may be at risk.

HP may be correct about trade secrets, and Hurd will have to be careful. But this is California. We have this wonderful law, section 16600 of the Business and Professions Code. The statute goes all the way back to the Civil Code of 1872, and except for very limited exceptions, "every contract by which anyone is restrained from engaging in a lawful profession, trade or business or any kind is to that extent void."

In simple terms what this means is that attempts to keep you from joining another company to practice your chosen profession have repeatedly been rejected by California courts.

HP's legal theory may run along the "inevitable disclosure" doctrine, that Hurd is bound to reveal some of HP's secrets if he works for Oracle. The suit also claims that Hurd didn't tell HP he was joining a competitor. So what? That sounds like HP believes Hurd needs to ask their permission -- contrary to California law.

Here's what's interesting: HP would not be HP if California law had not insured that you can go from an Apple to an HP to an Oracle and back again. We embrace immigrants and talent and we know that restraining your ability to work where you want would be death to innovation.

Individuals, not corporations come up with new ideas. Entrepreneurs often fail, succeed, fail and succeed again -- all at different companies within 30 miles of one another. Smart companies know that talent is arguably more important than technology. If you doubt that, look at how fast Larry Ellison moved to grab Hurd.

In the age of broadband and wireless, and our work anywhere/anytime mantra, do we really want to leave machines free while we wrap chains around our brains? A recent history lesson shows why that may be a really bad idea.

There was a time when Boston's Route 128 was seen as a potential challenger to Silicon Valley. But the Valley grew and Route 128 faltered in the 1980's and 1990's. One theory that has been advanced to explain this difference is the relative freedom to quit, hire, and compete. Silicon Valley (and California law) embraced the free movement of ideas and knowledge; Boston did not and it permanently lost its technical edge. And by the way, something tells me that if David Packard and Bill Hewlett were alive today they'd be leading the pack to support free and open entrepreneurial exchange -- in California and beyond.

We are slugging it out in a global marketplace. This very same week new research is showing that U.S. high tech firms are increasingly hiring more technical people in China and India, leaving skilled Americans unemployed. California remains one of our few bright spots. It's a hotbed of personalities, ideas and companies.

Sure, we have our share of break-ups. Sometimes it can get messy. But your freedom to choose your workplace is central to our edge in technology and innovation.

Mark Hurd and you just want to be free.