The latest installment comes in the form of blog from Cisco’s legal counsel in reaction to a lawsuit from HP against one of its employees jumping to Cisco.
The unidentified employee (who AllThingsDigital suggests is former HP StorageWorks’ chief technologist Paul Perez), who worked at Hewlett-Packard for more than two decades, left HP and moved to California, where he asked a court to rule HP’s non-compete clause unenforceable in California. After a hearing was scheduled and Cisco’s legal department reached out to HP’s in, it said, an attempt to avoid legal action, the proverbial, um, spit hit the fan.
An attorney working for the employee in Texas spotted an HP filing online for a scheduled emergency hearing to block him from taking the job with Cisco. When the attorney showed up and told the Texas judge that a case already was underway in California, the judge tossed the case.
The judge in California, meanwhile, has since allowed the former HP employee to join Cisco.
In a blog post last week, Mark Chandler points out that the lawsuit against the HP employee was the third such action HP has taken in the past two years, attributing it to employees “seeking safe ground amidst the chaos of executive turnover,” adding that “we can probably expect to see more desperate moves to lock up human capital.”
Chandler questions the success of trying to retain employees through the threat of litigation, and tongue-in-check writes that HP could change it slogan from “HP Invent” to “HP Sue.”
Chandler points out that “in Silicon Valley, human capital is as mobile as financial capital,” and contends that the Valley’s growth has been driven, in part, by the idea that employees are free “to find the best way to use their skills and advance their careers.”
“Somehow, Bill Hewlett and Dave Packard didn’t see a need to build a company based on suing people who might want to leave,” he writes. “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.”
As Chandler points out, although some states will enforce non-compete clauses in employment contracts, companies don’t have to pursue them unless they want to.
With both companies competing for a relatively limited pool of top execs, and, in a market that has become so competitive and profits slim as margins have tightened, it iss doubtful that the rivalry between the two will cool on any level.
In fact, with new CEO Meg Whitman being pushed to turn things around at HP yesterday (and with a board that has a notoriously itchy trigger finger when it comes to firing CEOs), the likelihood that there will be more pressure flowing downstream is likely to lead to more defections.
Chandler, meanwhile, writes that Cisco, regardless of where its employees live and work, will abide by California’s rule in favor of employee mobility.
Cisco, he said, is putting up a challenge to HP and Whitman, noting that the new CEO has been “deeply steeped in Silicon Valley’s environment of mobility and opportunity,” to “support employee freedom and stop suing employees just for leaving.”