Wipro settles dispute with former CFO Jatin Dalal
- Dalal’s new employer, Cognizant Technology Solutions Corp, agreed to pay him about half a million dollars ( ₹4.2 crore) as settlement payment and legal fees.
Wipro Ltd and its former chief financial officer (CFO) Jatin Dalal have settled their nine-month dispute as Dalal’s new employer, Cognizant Technology Solutions Corp, agreed to pay him about half a million dollars ( ₹4.2 crore) as settlement payment and reimbursement of his legal fees.
This is the second such case within four months of Wipro chief executive officer (CEO), Srinivas Pallia taking charge, that the company has settled lawsuits filed against its former senior executives.
“On 2 July 2024, the Compensation and Human Capital Committee of the Board of Directors of Cognizant Technology Solutions Corp. (the "Company”) approved the Company’s payment of $505,087 to Mr. Jatin Dalal, the Company’s Chief Financial Officer, in connection with Mr. Dalal’s settlement of the lawsuit and related arbitration brought by his former employer, Wipro Ltd (“Wipro”), which sought to obtain damages and injunctive relief arising out of Mr. Dalal’s purported breach of non-compete and confidentiality obligations under certain of Mr. Dalal’s compensation agreements with Wipro by joining the Company,” read Cognizant’s filing to stock exchanges.
Cognizant paying ₹4.2 crore to Dalal as settlement money and reimbursement of his legal fees is a sixth of what the Bengaluru-based Wipro had demanded from Dalal as damages, suggesting that the actual settlement amount is less than half a million dollars.
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“Cognizant would likely have agreed to cover all costs, including any legal costs, incurred by Jatin Dalal in his transition from Wipro to Cognizant,” said Shriram Subramanian, founder and managing director of proxy advisory firm InGovern Research.
Mint could not independently ascertain the total settlement amount arising out of the arbitration or the legal fees.
Emails sent to Wipro and Karan Joseph, partner at Shardul Amarchand Mangaldas representing Jatin Dalal, went unanswered until press time.
"I am grateful for my journey with Wipro and I am pleased to have this matter behind me,” said Dalal in a story posted by Cognizant on its website.
Mint had reported on 13 May that Wipro was looking to settle disputes with its former top executives after the joining of new CEO Srinivas Pallia on 6 April 2024.
Jatin Dalal was Wipro’s CFO since April 2015 and had worked in the company for more than two decades. However, things took a turn when Wipro announced Dalal’s resignation on 21 September 2023 with 30 September bound to be his last working day. A week after Dalal’s resignation was announced, Teaneck, New Jersey-based Cognizant announced Dalal as its CFO.
Before Dalal could even complete his last working day at Wipro, the Bengaluru-based information technology (IT) services company filed a complaint in a Bengaluru city court, alleging that Dalal had not adhered to the employment contract which restricted him from working with Wipro’s rivals for a period of up to one year. The software services company also sought ₹25.1 crore in damages from Dalal.
Early this year in January 2024, a Bengaluru civil court referred the matter to arbitration with both parties appointing a sole arbitrator in Bengaluru.
Arbitration is a legal dispute resolution process in which an impartial third party settles the dispute between the aggrieved parties, without having to go to court.
A similar case pertaining to Mohd Ehteshamul Haque, formerly Wipro’s head of healthcare and medical devices, was headed the settlement route and is now settled, Cognizant has confirmed.
Haque joined Cognizant in August 2023 as its chief commercial officer for the Americas region shortly after leaving Wipro in June 2023.
"It is stipulated and agreed as of this 8th day of July, 2024, that all claims and causes of action in the above-captioned matter, having been amicably adjusted by and between the parties, are hereby DISMISSED WITH PREJUDICE and without costs," Wilson Sonsini Goodrich & Rosati, the law firm representing Wipro against its dispute with Mohd Haque, informed a court in New Jersey on 8 July.
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Wipro had initiated legal action against Haque in a New Jersey court on 22 December 2023, demanding a jury trial for his breach of non-compete clauses by joining a direct competitor within 12 months of ending his employment with Wipro.
The software services company ended the March 2024 quarter with $2.66 billion in revenue. The software services company announces its quarterly earnings for the three months ended June 2024 on 19 July.
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First Published:9 Jul 2024, 06:21 PM IST
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