Why Wipro Is Suing A Former Exec For Joining Cognizant In The US

Wipro has lodged a complaint against a former senior executive, accusing him of violating a non-compete clause in his employment contract by joining direct competitor Cognizant.

What Happened: Mohd Haque, who resigned from Wipro in June, had agreed to post-employment restrictions, including refraining from working for a set of the IT firm’s competitors, including Cognizant, for 12 months after leaving the company, according to Wipro.

The complaint filed in a US court highlighted that Haque, upon being promoted to Wipro's senior vice president (SVP) role and localising as a US employee, stood eligible to receive over $1 million (₹8.3 crore) in equity awards over several years.

See Also: Why JSW Energy Share Price Is Climbing Today

The complaint, as reported by media reports, alleges that Haque began violating his non-compete commitments by working for Cognizant Technology Solutions around August 1 this year. Wipro claims Haque concealed his upcoming employment with Cognizant to gain an unfair advantage over Wipro upon joining the competitor.

Sensitive Information: Wipro also asserted that Haque possessed confidential information and uploaded seven files containing sensitive data from his personal Gmail account, which was flagged by Wipro’s IT team.

Wipro contends that Haque surreptitiously uploaded multiple files shortly before his resignation, misrepresented his intentions to Wipro, and untruthfully stated that he was not planning to work at Cognizant. Cognizant, headquartered in the US, directly competes with Wipro in the digital healthcare services sector, where Haque worked during his tenure at Wipro.

Wipro’s legal counsel reportedly sent a letter to Haque on September 29 reminding him of his contractual obligations and the potential consequences of breaching them. Wipro has demanded a jury trial in this matter.

Haque, who joined Wipro in 2010 as the vice president of enterprise application services in Bengaluru, has over 27 years’ of experience in the industry. He was promoted to senior vice president and sector head for healthcare and medical devices in the US last year.

Not The Only Problem: These developments occur amid several senior-level executives resigning from Wipro over the past 12 months, coinciding with a challenging period for the IT sector, experiencing slow growth and a pessimistic outlook for the financial year ending March 2024.

Read Next: This Small Cap Stock Has Dipped 5% This Month, Analyst Sees Strong 50% Comeback