BENGALURU: Cognizant has paid Rs 4 crore to its CFO, Jatin Dalal, to settle the lawsuit and associated arbitration with his former employer, Wipro. Cognizant paid Dalal although the corporate was not named within the order from the Bengaluru Civil Court in January, the place he invoked his rights to an arbitral tribunal. Cognizant wasn’t named within the arbitration proceedings both.
In its press launch, Cognizant stated that the phrases of the settlement, which was reached with none admission of legal responsibility by both get together, are confidential.It additionally talked about that the settlement resolves all pending disputes between Dalal and Wipro. “The settlement was reached without admission of liability by either party. The company’s payment covers Dalal’s settlement payment to Wipro as well as reimbursement of his legal fees,” Cognizant stated in a submitting with the SEC on Tuesday.
Wipro had sought Rs 25 crore from Dalal for breach of contract after he joined Cognizant as CFO instantly after leaving Wipro in November final yr. The declare is predicated on the worth of RSUs and PSUs granted to Dalal since he grew to become CFO in 2015.The firm had stated within the court docket submitting that each one of many grants got here with the situation that for a interval of 12 months after his final date of employment, Dalal couldn’t straight or not directly have interaction with a competitor, couldn’t solicit a Wipro buyer to transfer the prevailing enterprise to one other get together, and couldn’t solicit a Wipro worker to be related with a competitor, provider, or buyer.
“I’m grateful for my journey with Wipro, and I’m happy to have this matter behind me. I’m wanting ahead to persevering with to drive Cognizant’s development agenda whereas delivering worth to our purchasers, workers, and shareholders,” stated Dalal in an announcement. Saurabh Govil, president and CHRO at Wipro, stated, (*4*) When TOI requested Wipro whether or not a compromise between Dalal and Wipro was reached, on condition that the settlement quantity is far smaller in contrast to what Wipro had sought, the corporate did not reply to TOI’s queries.
Some proxy advisory specialists have stated that this settlement has raised questions on whether or not it has set a sure precedent within the business concerning non-compete contractual obligations. Shriram Subramanian, founder and managing director of the proxy advisory agency InGovern Research Services, stated it’s not clear why, within the association between Wipro and Dalal, the settlement quantity was decreased. “Wipro should inform its shareholders what the eventual settled amount is, in comparison to its claim over its erstwhile CFO.” Cognizant, Subramanian stated, has set a nasty precedent by poaching a senior govt of a rival firm with express data of a breach of contract within the non-compete and confidentiality association. “By agreeing to pay the settlement amount, Cognizant has further set a precedent that contracts may be broken by the poaching company paying off the breakage amount. Cognizant would have been aware of the terms of Dalal’s employment contract. It would have taken a conscious decision to hire by breaking a contract, rather than wait out the contract period. Headhunters and search firms should advise their clients against such practices,” he stated.
In one other growth, Cognizant stated it has entered the same settlement concerning the lawsuit between Wipro and its former SVP and healthcare head, Mohammad Haque. Wipro moved court docket towards Haque, who then sought arbitration. Wipro has filed a grievance towards Haque for violating non-compete clauses in his employment contract by becoming a member of Wipro’s direct competitor, Cognizant.
Haque took cost because the chief business officer at Cognizant on August 1 final yr, and he cited that the brand new position includes a extra expansive portfolio of obligations, the potential to earn more cash, and extra alternative for development. He relocated to California after taking over the brand new place with Cognizant. A US court docket submitting on Monday confirmed that Wipro and Haque have agreed that each one claims and causes of motion have been amicably adjusted between the events, and with out prices.
In its press launch, Cognizant stated that the phrases of the settlement, which was reached with none admission of legal responsibility by both get together, are confidential.It additionally talked about that the settlement resolves all pending disputes between Dalal and Wipro. “The settlement was reached without admission of liability by either party. The company’s payment covers Dalal’s settlement payment to Wipro as well as reimbursement of his legal fees,” Cognizant stated in a submitting with the SEC on Tuesday.
Wipro had sought Rs 25 crore from Dalal for breach of contract after he joined Cognizant as CFO instantly after leaving Wipro in November final yr. The declare is predicated on the worth of RSUs and PSUs granted to Dalal since he grew to become CFO in 2015.The firm had stated within the court docket submitting that each one of many grants got here with the situation that for a interval of 12 months after his final date of employment, Dalal couldn’t straight or not directly have interaction with a competitor, couldn’t solicit a Wipro buyer to transfer the prevailing enterprise to one other get together, and couldn’t solicit a Wipro worker to be related with a competitor, provider, or buyer.
“I’m grateful for my journey with Wipro, and I’m happy to have this matter behind me. I’m wanting ahead to persevering with to drive Cognizant’s development agenda whereas delivering worth to our purchasers, workers, and shareholders,” stated Dalal in an announcement. Saurabh Govil, president and CHRO at Wipro, stated, (*4*) When TOI requested Wipro whether or not a compromise between Dalal and Wipro was reached, on condition that the settlement quantity is far smaller in contrast to what Wipro had sought, the corporate did not reply to TOI’s queries.
Some proxy advisory specialists have stated that this settlement has raised questions on whether or not it has set a sure precedent within the business concerning non-compete contractual obligations. Shriram Subramanian, founder and managing director of the proxy advisory agency InGovern Research Services, stated it’s not clear why, within the association between Wipro and Dalal, the settlement quantity was decreased. “Wipro should inform its shareholders what the eventual settled amount is, in comparison to its claim over its erstwhile CFO.” Cognizant, Subramanian stated, has set a nasty precedent by poaching a senior govt of a rival firm with express data of a breach of contract within the non-compete and confidentiality association. “By agreeing to pay the settlement amount, Cognizant has further set a precedent that contracts may be broken by the poaching company paying off the breakage amount. Cognizant would have been aware of the terms of Dalal’s employment contract. It would have taken a conscious decision to hire by breaking a contract, rather than wait out the contract period. Headhunters and search firms should advise their clients against such practices,” he stated.
In one other growth, Cognizant stated it has entered the same settlement concerning the lawsuit between Wipro and its former SVP and healthcare head, Mohammad Haque. Wipro moved court docket towards Haque, who then sought arbitration. Wipro has filed a grievance towards Haque for violating non-compete clauses in his employment contract by becoming a member of Wipro’s direct competitor, Cognizant.
Haque took cost because the chief business officer at Cognizant on August 1 final yr, and he cited that the brand new position includes a extra expansive portfolio of obligations, the potential to earn more cash, and extra alternative for development. He relocated to California after taking over the brand new place with Cognizant. A US court docket submitting on Monday confirmed that Wipro and Haque have agreed that each one claims and causes of motion have been amicably adjusted between the events, and with out prices.
