Phaneesh Murthy sues iGate for 'improper' termination

Former iGate chief executive Phaneesh Murthy has slapped a multi-million dollar law suit against the IT major for "improperly" terminating his employment. California-based iGate had sacked Mr Murthy for failing to disclose his relationship with a subordinate in May this year. (Read full story here)

In a lawsuit filed before a California court last week, Mr Murthy claimed iGate knew about his relationship with the subordinate employee, but "improperly" used the reporting policy to terminate him.

"I have a letter from one of the independent directors of the Board of iGate saying he knew of my relationship with the employee since January 2012," Mr Murthy told PTI.

However, iGate spokesperson Prabhanjan Deshpande said: "We believe that this claim has no merit, and we intend to vigorously defend this action."

Mr Murthy has also claimed that the company has held back his employee benefits and vested stocks due to him.

"As per the employee contract, I'm eligible for the vested stock, which is 527,000. The worth of my vested stock is about $17 million and it is my life saving. I did not sell the stocks as the Board requested me not to sell saying it would send a negative signal," he said.

Mr Murthy said he is also claiming other termination benefits and his lawsuit is for vested stock, termination benefits and damages from iGate.

"Employment contracts are sacrosanct. I have put in lot of hard work and created value for the firm and still if they do not to honour the contract, it is not a good thing. This will not stand in the US court," he said.

Mr Murthy was sacked for violating the company's policy on relationship with a colleague. He is, however, entitled to a post termination benefit of $6,000 per month till he and his spouse reach the age of 65 as per a filing with the SEC in May 2013.

Mr Murthy, one of the youngest directors and a rising star at India's second largest software services firm Infosys, was forced to quit the firm in 2002 following a sexual harassment lawsuit that was settled out of court.