Daijiworld Media Network - New Delhi
New Delhi, Nov 23: Tata Consultancy Services (TCS) has suffered an adverse ruling in its prolonged legal battle with DXC Technology after the United States Court of Appeals for the Fifth Circuit upheld a Texas District Court’s damages order against the Indian IT giant.
In a regulatory filing dated November 22, TCS said the appellate court affirmed the lower court’s ruling on monetary damages but overturned an earlier injunction, sending that portion of the order back to the Texas court for fresh consideration.
The dispute originated in 2019 when Computer Sciences Corp. (CSC), which later merged with DXC Technology, accused TCS of misusing its proprietary insurance software. CSC alleged that TCS gained access to the software through Transamerica employees who joined TCS as part of a $2-billion outsourcing deal, enabling the company to develop a competing insurance platform.
According to a previous regulatory disclosure on June 14, 2024, the District Court had ordered TCS to pay a total of $194.2 million in damages — comprising $56.15 million in compensatory damages, $112.30 million in exemplary damages, and $25.77 million in prejudgment interest.
Following the latest judgment, TCS announced that it is evaluating all legal remedies, including further appeals or review petitions. The company has reiterated that it will “vigorously defend its position” and make appropriate financial provisions in line with accounting norms.
Meanwhile, TCS is also under domestic regulatory scrutiny. Earlier this month, the Labour Commissioner’s Office in Pune summoned the company over complaints filed by the Nascent Information Technology Employees Senate (NITES) alleging unlawful terminations amid the company’s plan to cut about two percent of its global workforce. The hearing in the matter was scheduled for November 18.
NITES said in a post on X that the summons relates to “illegal termination of employment and unlawful layoffs,” adding to the mounting regulatory and legal challenges confronting India’s largest IT services company.