HP Can Keep Secret Report on Hurd Departure

Hewlett-Packard Co does not have to turn over to a shareholder an internal report that led to the departure of former chief executive Mark Hurd, Delaware's Supreme Court ruled.

Hurd abruptly resigned last year following allegations of sexual harassment against an HP contractor. A company investigation cleared Hurd of harassment, but accused him of filing inaccurate expense reports.

A shareholder, Ernesto Espinoza, sued the company to determine whether the board had grounds to fire Hurd rather than pay him a $30 million separation.

Hurd has since joined Oracle Corp as president.

HP provided Espinoza with copies of board minutes, expense reports and a letter detailing the harassment claims from Gloria Allred, a high-profile attorney who represented the contractor. Those documents were subject to confidentiality agreements.

However, the company argued attorney-client privilege protected an investigation prepared for the board by the Covington & Burling law firm.

Delaware's Supreme Court agreed with Chancery Court judge Donald Parsons that Espinoza failed to show that it was essential for him to review the Covington report.

A spokeswoman for law firm Robbins Umeda, which is representing Espinoza, said the firm was "obviously disappointed" but that it respected the court's decision.

Separately, the Delaware Supreme Court is considering an appeal of a Chancery Court decision to unseal Allred' letter.

The case is Ernesto Espinoza v Hewlett Packard Co, Delaware Supreme Court No. 208, 2011; Delaware Chancery Court, No. 6000. (Reporting by Tom Hals; Editing by Gary Hill, Bernard Orr)