Wipro Sues Ex-CFO for Rs. 25 Crore: Breach of Non-Compete Sparks Legal Tussle

The tech world is buzzing with a high-stakes legal battle after Wipro filed a lawsuit against its former Chief Financial Officer (CFO), Jatin Dalal, seeking Rs. 25.15 crore in damages. The central issue? Dalal's departure to join Wipro's rival, Cognizant, allegedly breaching a crucial non-compete clause in his employment contract.

The Plot Thickens:

Dalal served as Wipro's CFO for 21 years, playing a key role in its growth and success. However, in September 2023, he tendered his resignation, citing personal reasons. Just three months later, he made a surprising move, joining Cognizant as its new CFO on December 1st.

Non-Compete Clause: A Thorny Barrier:

Wipro's lawsuit hinges on a non-compete clause in Dalal's contract. This clause restricted him from joining a competitor for a specific period after leaving Wipro. In this case, the alleged agreement barred Dalal from working for a rival for 12 months. By accepting Cognizant's offer, Wipro claims Dalal violated this clause, causing the company potential harm.

Clawing Back Value:

The hefty sum Wipro seeks includes:

• Compensation for the value of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) allegedly granted to Dalal during his tenure.
• Damages for potential loss of confidential information and trade secrets Dalal might possess.
• Costs incurred due to hiring a replacement CFO.

Dalal's Defense:

Dalal has reportedly countered Wipro's claims, arguing that the non-compete clause is unreasonable and unenforceable. He might also argue that his new role at Cognizant doesn't directly compete with Wipro's core business areas, thus not posing a genuine threat to his former employer.

Beyond the Lawsuit:

This legal battle not only impacts Dalal and Wipro, but also sets a precedent for non-compete clauses in the IT industry. The outcome could affect future contracts and employee mobility within the sector.

Uncertain Road Ahead:

The lawsuit has only just begun, and the legal process could be lengthy and complex. Both parties will have to present their arguments in court, and the final verdict will determine whether Dalal must pay the hefty damages and face further consequences.