BENGALURU/MUMBAI: Blackstone-owned Mphasis Ltd has filed a lawsuit in a US court against rival Coforge Ltd, accusing the Noida-based IT services firm of hiring its employees in violation of contractual restrictions and gaining access to confidential client information.
The Bengaluru-based company, which reported $1.8 billion in revenue last year, has also named its former vice president Brijesh Khergamker as a party in the case filed in a Colorado court. Mphasis alleges Khergamker breached his employment agreement by joining a rival firm less than a year after leaving the company.
“Coforge has initiated a campaign of recruiting Mphasis employees to obtain an unfair competitive advantage in the design, implementation, and maintenance of information technology services and digital solutions,” read Mphasis’s lawsuit filed on 31 March and which appeared in the public database last week.
“Defendants’ actions give Coforge an unfair business advantage in the information technology services industry at Mphasis’ expense by giving Coforge access to Mphasis’ confidential Information, trade secrets, and information pertaining to its customers without expending any time or resources,” the lawsuit added.
Coforge, which nudged past Mphasis last year to become the country’s seventh largest IT services firm, ended with $1.87 billion in revenue, a 29.2% growth, the fastest among all large and small IT services firms.
Khergamker left Mphasis in July last year and joined Coforge in the same month, which, according to Mphasis, violates a contractual restriction that bars employees from working for rivals for up to a year.
According to the lawsuit, Khergamker and another Mphasis executive, handled IT and sales-related work for Charles Schwab, a Texas-based brokerage and its largest client. Both had access to Mphasis’s proprietary knowledge of sales strategy, technical requirements, and other financial matters related to this client.
It alleges Khergamker is now working on the same client account at Coforge.
Mphasis has asked the Colorado court to restrain Khergamker from working on the Charles Schwab account for a year from the time an injunction is filed. It has also sought to prevent alleged poaching of employees, require him to hand over client-specific information, and bar the use of its proprietary information.
Emailed queries sent to Mphasis on Wednesday did not receive a response till press time.
“The current action is an attempt to interfere with fair competition in the marketplace. And it is not the first instance when people from competing firms have joined Coforge,” the company said in response to Mint’s email.
“We have had people join us from organizations that have struggled with growth. We deny all allegations of wrongdoing in the complaint, and we intend to vigorously defend ourselves and our employee in this matter,” it added.
Broader enforcement
The Mphasis-Coforge dispute comes after three of their larger peers, including Accenture Plc, Infosys Ltd, and Wipro Ltd, took former employees to court over alleged breaches of anti-competition clauses.
In January last year, Infosys named former executive and current chief executive of Cognizant Technology Solutions Corp., Ravi Kumar, for delaying the rollout of its healthcare product while he was in talks to join the Nasdaq-listed firm as its chief executive, and also for poaching key talent from Infosys. Both Infosys and Cognizant agreed to settle the case last year.
In September 2023, Wipro filed a case against its former chief financial officer, Jatin Dalal, in a Bengaluru court, alleging breach of an employment contract that included a clause preventing him from joining competitors for up to a year. In December 2023, Wipro filed a second case in a US court against its former head of healthcare business for joining Cognizant. Both cases were settled after the executives agreed to pay money.
In March 2021, Accenture Plc filed a lawsuit in a New York court against its former employee, Stephanie Trautman, for joining Wipro as its chief growth officer less than a month after leaving Accenture, and without informing her former employer in advance.
Mint could not independently ascertain the outcome of the case.
A rise in IT services firms seeking court intervention to enforce employment agreements comes at a time when companies are struggling for growth, even as automation tools have intensified competition and increased sensitivity around employee movement to rivals with access to proprietary systems.
“That (rise of IP and automation platforms) is making firms far more sensitive to employees moving to competitors during cooling-off periods, because the perceived risk is no longer gradual knowledge leakage; it is accelerated capability transfer. As a result, companies are becoming more aggressive in enforcing non-competes, IP protections, and litigation as a defensive move to protect what they increasingly see as their core digital assets,” said Phil Fersht, chief executive of HFS Research, an outsourcing research firm.
Pattern of mobility
Mphasis’s filing also indicates it was aware of employee movement to Coforge well before Khergamker joined. While the company has filed a complaint against one former employee, it has named three others in the lawsuit who joined Coforge less than a year after leaving Mphasis.
On 19 February 2025, Mphasis first sent cease-and-desist letters to Coforge and two of its employees, including senior vice-president Sudeep Mehandru and vice-president Himanshu Gupta. Both work in Coforge’s healthcare and lifesciences business.
Eight months later, it sent another cease-and-desist letter to Coforge, warning that more employees might be violating their contracts and joining the Noida-based firm.
The 31 March complaint also names Babu Mani, client partner at Coforge.
Coforge responded on both occasions, but Mint could not independently ascertain the date and contents of Coforge’s replies. Both Khergamker and Mani continue to work with the Schwab client.
For now, Mphasis has said that Coforge “intentionally and without justification continues to interfere with Mphasis’ relationship with Khergamker” by permitting him “to solicit and sell products to Mphasis’ customer on behalf of Coforge” and for receiving and using Mphasis’ confidential information in violation of the agreements.”
Mphasis is represented by Ogletree, Deakins, Nash, Smoak & Stewart, P.C., a South Carolina-based law firm.
