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UPDATE 2-HP says executive from EMC cleared to start work

* Donatelli begins work at HP

* Blocked from working on storage business in near term (Recasts lead, adds statement from EMC)

SAN FRANCISCO, May 26 (Reuters) - Hewlett-Packard Co HPQ.N said on Tuesday a Massachusetts court has cleared a top executive who was lured away from rival EMC Corp EMC.N to begin working for the company, although his role at least initially will be different.

HP said the Suffolk County Superior Court of Massachusetts entered an order that allows David Donatelli to join HP, modifying an earlier ruling that temporarily blocked him.

Donatelli, who started at HP on Tuesday, will serve as its executive vice president of enterprise servers and networking. However, under the terms of the court order, Donatelli will not be working on the storage business, as HP originally planned, after HP and EMC clashed over a non-compete clause he signed.

“We are pleased with the court’s ruling upholding the terms of our key employee agreement,” EMC spokesman Michael Gallant said. “The judge has entered an order as proposed by EMC that precludes Mr. Donatelli from being engaged in any aspect of HP’s business that overlaps or competes with EMC’s storage business for a 12-month period.”

HP said Dave Roberson will be in charge of the storage business in the interim. In a release, the company said it was pleased with the court’s decision.

Donatelli was previously president of EMC’s storage division, which accounted for roughly three-fourths of EMC’s $14.9 billion in revenue last year.

EMC filed suit and sought a preliminary injunction to bar Donatelli from taking the job, citing the non-compete clause. The court blocked him from starting at HP until the two companies resolved the dispute.

Donatelli also filed suit in California, which generally does not recognize such clauses, seeking to dissolve that agreement.

Shares of Palo Alto, California-based HP closed up 1 percent at $34.47 on the New York Stock Exchange. Shares of Hopkinton, Massachusetts-based EMC rose 3.5 percent to $12.02, also on the NYSE. (Reporting by Gabriel Madway; Editing by Richard Chang and Steve Orlofsky)

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