As part of the non-compete agreement, one of the clauses barred Dalal from joining any other rival company for a period of 12 months from the date of his resignation. After a stint of 21 years at Wipro, Dalal resigned as the CFO of Wipro in September and served his last day until November 30, following which he joined global rival Cognizant on December 1.
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For now, Dalal has submitted a counter application, seeking the Bengaluru civil court to refer the matter to arbitration. Arbitration refers to a process whereby disputed parties agree to resolve their differences through an impartial third party, known as an arbitrator, instead of going to court. Both parties have presented their arguments to the court on November 28.
The next hearing has been scheduled for January 3.
“As per the agreements, the defendant is liable to recompense the plaintiff the total number of RSU granted multiplied by the share price prevailing on the date of the award or the calculated sum equivalent to the gross remuneration earned by the defendant during the last 12 months of service (as applicable),” according to the contents of the lawsuit, a copy of which has been seen by ET.
It added, “However, without prejudice and in good faith the plaintiff has restricted its claim, which is calculated as INR 25,15,52,875/- (Rupees Twenty Five Crores Fifteen Lakhs Fifty Two Thousand Eight Hundred and Seventy-five) along with interest calculated at 18% per annum until the date of payment.”
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In the above case, Wipro is the plaintiff while Dalal is the defendant. Restricted stock unit (RSU) is the shares awarded to an employee, in this case, Dalal.There is also a restraint on Dalal from disclosing confidential information, soliciting customers or employees in any manner.
Wipro has also raised questions on Dalal’s undertaking on joining Cognizant, stating that Dalal continues to be “bound by his obligations under the agreements and any statement of the defendant alluding to the contrary is false and misleading”.
“As a result, the defendant has caused Cognizant to submit materially false and misleading statements in its SEC filing. The defendant’s actions and conduct shows blatant disregard to his contractual and fiduciary obligation,” the papers showed.
At Cognizant, Dalal would be taking home around $5.2 million as annual compensation and $300,000 as a sign-on bonus.
At Wipro, Dalal’s salary dropped by 26% from Rs 12.07 crore ($1.5 million) in the 2021-22 financial year to Rs 8.92 crore ($1 million) in the 2022-23 financial year.
Dalal, a Wipro veteran, joined in 2002 and quit in November this year after serving as the CFO since 2015 to join Cognizant.
At the US-headquartered IT giant, he will succeed Jan Siegmund, who will retire in early 2024. Dalal will be reporting to the company’s CEO Ravi Kumar S, who joined in January 2023 from Infosys. Since then, Kumar has likely hired at least 20 executive vice presidents and four senior vice presidents, largely from Wipro and Infosys.
Recently, Wipro also filed a complaint against its former senior executive Mohd Haque, who in August allegedly joined Cognizant, a direct competitor of Wipro, leading to violation of a non-compete clause in his employment contract. Haque quit Wipro in June this year after a nearly 13-year stint at the fourth largest Indian IT firm.
The complaint against Haque also presses serious charges where Wipro has alleged that Haque was in possession of confidential information whereby he uploaded and emailed “seven files” containing confidential information from his personal Gmail account on or about June 20, 2023, that was flagged off by its IT team on June 22.
