Mphasis Files Lawsuit Against Coforge in US Court Over Alleged Employee Hiring and Client Data Access

Mphasis Sues Coforge Over Alleged Contract Violations and Confidential Data Misuse

Indian mid-tier software firm Mphasis has filed a lawsuit against rival Coforge in a U.S. court, claiming that the latter had hired its executives in violation of contract restrictions and gained access to confidential client information. The filing, dated March 31, seeks injunctive relief to prevent Coforge from employing two of Mphasis' former executives on Charles Schwab accounts, a mutual client of both companies.

Mphasis is also asking the court to bar former Vice President Brijesh Khergamker, 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. According to the filing, this would be a violation of Khergamker's employment contract.

Coforge has denied all allegations of wrongdoing, stating that it intends to vigorously defend itself and the employee in the matter. The company also indicated that it is evaluating potential counterclaims and plans to grow its business relationship with Charles Schwab, an existing client for many years.

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Mphasis has emphasized that its top priority is to protect its clients and will take necessary action to enforce its rights when left with no other conciliatory alternatives. The company has also sought compensatory damages and reimbursement of attorney fees and related costs.

The lawsuit alleges 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. Mphasis has accused Coforge of using its confidential data to gain an advantage, as demand for Indian IT services has slowed and competition intensified in recent years.

This is not the first instance of Indian IT companies taking legal action against rival firms for alleged contract violations and executive poaching. Early last year, Infosys, India's second-largest IT firm, filed a counterclaim against rival Cognizant, saying that the U.S.-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.

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