Hurd Fired For Quickie Sex-Harass Settlement?

Report says HP decided to let CEO go after he reached an out-of-court accord with Jodie Fisher without board authorization.

Paul McDougall, Editor At Large, InformationWeek

August 16, 2010

2 Min Read

The last straw for HP's board when it came to deciding whether to fire Mark Hurd may have been a hurried settlement the CEO reached with the blonde marketing contractor who filed a sexual harassment complaint against Hurd.

The settlement, according to a report Monday in The Wall Street Journal, was not authorized by Hewlett-Packard's board and derailed a probe board members were conducting into Hurd's relationship with Jodie Fisher.

Citing unnamed sources, the newspaper said the settlement came one day before Fisher and her lawyer were scheduled to meet with attorneys representing Hurd and HP.

But other sources told the newspaper that some HP board members urged Hurd to reach the settlement prior to the meeting. Neither Hurd, HP, or Fisher have provided details of the entanglement beyond brief statements issued by the parties on August 6, the day HP announced Hurd's departure.

The company said an investigation by outside legal counsel and its own General Counsel's office found that Hurd, 53, did not violate its sexual harassment policies, but broke the company's Standards of Business Conduct rules.

HP immediately appointed CFO Cathie Lesjak, 51, as interim CEO while it carries out a search for a full-time replacement for Hurd. But the company's efforts to move on quickly from the scandal aren't likely to be successful.

Beyond whatever tawdry details may emerge, HP is bound to face ongoing legal woes in the wake of the affair. A group of shareholders last week sued the company and its board in California Superior Court, in part over the decision to let Hurd walk away with as much as $40 million in severance pay and other benefits.

The plaintiffs, who also noted that Hurd's sudden exit wiped out $9 billion in HP market capitalization, argued that Hurd should have been terminated for cause, in which case he'd be in line for a considerably smaller payout.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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