Wipro Seeks Settlement with Former Executives Who Jumped Ship to Competitor Cognizant

Wipro, a leading Indian IT company, is finalising a settlement agreement with two former high-ranking executives who departed for rival firm Cognizant — Jatin Dalal, the former chief financial officer (CFO), and Mohd Haque, the ex-head of Wipro’s healthcare business. According to a Times of India report citing sources, the pact is expected to be executed within this week among Wipro, Cognizant, Dalal, and Haque.

The story began when both Dalal and Haque left Wipro in November 2023. Soon after, Dalal joined Cognizant, another major IT player, as their CFO. This move triggered a lawsuit from Wipro, seeking Rs 25 crore (approximately $3.1 million) from Dalal for allegedly breaching his contract as he joined rival Cognizant CFO immediately after leaving Wipro on November 30.

The lawsuit claimed that the compensation package offered to Dalal during his time as Wipro’s CFO included benefits like restricted stock units (RSUs) and performance stock units (PSUs).

These units typically vest over time, and Wipro argued that by leaving before his contract expired, Dalal owed them the value of the unvested stock units.

Haque, on the other hand, faced legal action for allegedly violating a non-compete clause in his employment contract with Wipro, by joining a direct competitor Cognizant. Non-compete agreements restrict employees from joining specific competitors for a certain period after leaving the company.

While the details of Haque’s non-compete clause haven’t been made public, his decision to join Cognizant likely triggered a violation according to Wipro.

Following the initial lawsuits filed in a Bengaluru court in January 2024, both sides seem to be moving towards an amicable resolution.

Following an order from the Bengaluru civil court in January, Dalal invoked his rights to an arbitral tribunal.

Reports suggest that a settlement agreement is being finalised, involving all four parties — Wipro, Cognizant, Dalal, and Haque.

The exact terms of the settlement remain confidential, but it suggests a desire to avoid a prolonged legal battle.

However, this incident highlights the complexities surrounding employee movement within the competitive Indian IT industry. Companies often invest heavily in retaining top talent, and legal disputes over non-compete clauses and contract breaches are not uncommon.