In a recent lawsuit, Wipro accused Jatin Dalal, its former Chief Financial Officer (CFO), of breaking the non-compete agreement stipulated in his employment contract. According to the terms of the agreement, Dalal must wait a full year after his resignation date before joining a competitor company.

On November 28, the information technology services major filed a lawsuit in the Bengaluru civil court against Dalal in this regard.

According to the court document that Moneycontrol was able to obtain, Wipro additionally demands that Dalal pay Rs 25.15 crore in damages in addition to 18% interest until the date of payment.

According to the Agreements, Defendant will pay Plaintiff the total number of RSU awarded multiplied by the share price that was in effect on the date of the award OR the amount that was calculated to be equal to Defendant’s gross pay for the last 12 (twelve) months of service, whichever is higher. The lawsuit stated that the plaintiff had, nevertheless, limited its claim without prejudice and in good faith. The claim is valued at INR 25,15,52,875/- (Rupees Twenty-Five Crores Fifteen Lakhs Fifty-Two Thousand Eight Hundred and Seventy-five) plus interest computed at 18% (eighteen per cent) per annum until the date of payment.

In September, Wipro informed the exchanges of Dalal’s resignation. Shortly after, it was revealed that he had accepted a CFO position at competitor Cognizant. His employment with Wipro ceased on November 30.

In a countermove, Dalal has also filed an application asking the court to send the case to arbitration. The court has heard arguments from both parties, and January 3 is the date of the upcoming hearing. Having worked for Wipro for more than 21 years, Dalal has been the CFO since 2015. He will succeed Jan Siegmund in his new position at Cognizant, as the latter intends to retire in early 2024. Dalal will answer to Ravi Kumar S, the CEO of the business.

Overseeing a range of global financial functions, including corporate development, investor relations, tax, treasury, internal audit, financial planning and analysis, accounting and controllership, and enterprise risk management, will be among his duties.

In his Cognizant offer letter, Dalal signed a statement indicating that Cognizant would not be liable for any legal ramifications from his former employer, as noted in Wipro’s complaint.

This declaration serves as my representation and warranty to Cognizant that, (I) I am entering into this agreement voluntarily, and that carrying out my obligations under it won’t conflict with any other person, business, organization, or other entity; (II) I am not bound by any terms of any agreement with any previous employer or other party to refrain from engaging in direct or indirect competition with such previous employer or other parties, in any case, that would be violated by my entering into this agreement and/or providing services to Cognizant under its terms; and (III) I have read, understood, and accepted the above offer of employment and agree to the terms and conditions stated above,” the declaration.

Wipro’s action may put Dalal’s new position at Cognizant in jeopardy. In the meantime, Wipro has experienced almost ten high-level departures in 2023 alone, as CEO Thierry Delaporte battles to turn the company around in a demanding demand climate.

Another former senior executive is the target of a lawsuit from Wipro in a US court for allegedly breaking a non-compete agreement when he joined Cognizant. Mohd Haque, the former senior vice president (SVP) and head of healthcare and medical devices for the Americas at Wipro was the executive in question.

Haque was charged by the organization for allegedly having seven files containing sensitive data that were sent from his personal Gmail account after the IT department discovered them. According to Wipro, additional files were also uploaded and sent to his email account from outside the company.

Under the radar, cognizant

While the dispute over poaching among leading IT firms has gotten more heated in 2023, Infosys has also accused Cognizant of using unethical methods to poach employees.

On December 27, Moneycontrol revealed exclusively that Infosys had written to Cognizant to dissuade the company after several of its top executives left to work for the company. One of the sources stated, “This communication to Cognizant was more of a deterrent, but non-compete clauses are not enforceable.”