Indian mid-tier software firm Mphasis has filed a lawsuit against rival Coforge in a US court, claiming that Coforge hired its executives in violation of contractual restrictions and gained access to confidential client information, a Reuters report said.
In a filing dated March 31, Mphasis sought injunctive relief to prevent Coforge from employing two of its former executives on Charles Schwab accounts – a mutual client of both companies – and from using Mphasis’ confidential data.
As per the report, Mphasis also asked the court to bar former Vice President Brijesh Khergamker, who is named as a party in the matter, from working in Charles Schwab’s outsourcing operations through Coforge for a year or accepting business from Mphasis customers, as it violated his employment contract.
Finnacialexpress.com couldn’t verify the news independently. We have sent emails to the representatives of both Coforge and Mphasis. We haven’t received any response by the time this news was published. However, we will update as soon as we hear from them.
Coforge’s response
As per the Reuters report, Coforge denied all allegations of wrongdoing and said it intends to vigorously defend itself and the employee in the matter.
In an email to Reuters, the company added that it is also evaluating potential counterclaims and said that the client mentioned in the complaint has been an existing client for many years, with which it intends to grow its business relationship.
Mphasis seeks damage compensation
Mphasis told Reuters that its top priority is to protect its clients and that it would take the necessary action to enforce its rights when left with no other conciliatory alternatives. Mphasis also sought compensatory damages and reimbursement of attorney fees and related costs, according to the exchange filing.
Mphasis said that Coforge gained an “unfair competitive advantage” in the delivery of IT services by hiring at least four senior-level employees mentioned in the filing.
Past instances in IT sector
As demand for Indian IT services has slowed and competition has intensified in recent years, companies have increasingly sued executives for violating their employment contracts.
Early last year, Infosys, India’s second-largest IT firm, filed a counterclaim against rival Cognizant, saying that the US -based company was engaging in anti-competitive practices and poaching key executives.
In 2023, Wipro sued former Chief Financial Officer Jatin Dalal after he joined Cognizant, claiming that the move violated the terms of his employment contract.