Palantir Technologies’ lawsuit against Percepta AI is a trade secret and breach-of-contract case filed in October 2025 in the U.S. District Court for the Southern District of New York against three former Palantir employees who left to co-found the competing AI startup Percepta. In February 2026, Judge J. Paul Oetken blocked the defendants from recruiting Palantir staff and from using confidential data, but refused to bar them from working at Percepta after finding Palantir’s 12-month noncompete unenforceable. In May 2026, the judge ordered the underlying claims to arbitration.
Who Palantir Sued
The defendants are three former Palantir employees now at Percepta AI, a startup that launched publicly on October 2, 2025 and is fully owned by venture capital firm General Catalyst. Percepta places engineers and product managers inside enterprises to help integrate AI into existing workflows, focusing on healthcare, financial services, manufacturing, and government — the same sectors Palantir serves.1General Catalyst. Unveiling Percepta
Hirsh Jain is Percepta’s CEO. At Palantir he was a deployment strategist who ran the U.S. government health business before resigning in August 2024. Radha Jain, his co-founder, was a Palantir AI product engineer who helped build the company’s AIP Logic software and left in December 2024. Joanna Cohen, a former forward-deployed engineer, had risen to become Palantir’s healthcare lead before departing in March 2025.2Wall Street Journal. Palantir v. Jain First Amended Complaint Palantir’s complaint says all three had access to what the company calls its “crown jewels”: source code repositories, internal demonstration workspaces, customer-deployed workflows, and proprietary client strategies.3Seward & Kissel LLP. Palantir Technologies v. Jain, Complaint
What Palantir Alleged
Palantir filed its initial complaint on October 30, 2025, naming Radha Jain and Joanna Cohen. The suit, Case No. 25-cv-08985, alleged breach of contract, trade secret misappropriation, and unfair competition. The two former employees had signed Proprietary Information and Inventions Assignment Agreements that included 12-month noncompete clauses, 24-month non-solicitation provisions covering both employees and customers, and confidentiality obligations. Palantir sought emergency injunctive relief.4CourtListener. Palantir Technologies Inc. v. Jain3Seward & Kissel LLP. Palantir Technologies v. Jain, Complaint
The complaint accused Cohen of photographing sensitive internal documents on her personal phone, including a healthcare revenue cycle management diagram, an internal demonstration planning framework, and a draft statement of work for deploying Palantir’s AI platform.3Seward & Kissel LLP. Palantir Technologies v. Jain, Complaint
On December 11, 2025, Palantir filed an amended complaint adding Hirsh Jain as a third defendant and describing what it called a coordinated effort to build a “copycat” company. The filing cited internal messages, including a November 2024 message from Hirsh Jain reading, “I’m down to pillage the best devs at palantir when they’re at their maximum richness,” and a message from Radha Jain stating, “God thinking about poaching is so fun.” Palantir alleged that Percepta had already hired at least 10 former Palantir employees and that its workforce was “disproportionately populated” with former Palantir staff.5CNBC. Palantir Sues Former Employees, Says Percepta Tried to Pillage Devs2Wall Street Journal. Palantir v. Jain First Amended Complaint The amended complaint asked the court to bar the defendants from working at Percepta or General Catalyst for 12 months.
How the Defendants Responded
In a January 2026 filing, Percepta’s lawyers argued that Palantir was trying to “stifle competition” and “scare others away from leaving and to destroy Percepta before it can grow further.”6CNBC. AI Palantir Percepta Lawsuit Theft The defense called Palantir’s restrictive covenants “facially overbroad and unenforceable” and said searches for Palantir materials at Percepta turned up nothing.7Times of India. AI Startup Execs Deny Poaching and Stealing Allegations Cohen’s lawyers said she photographed the documents in “good faith” to help finish her work and that the materials would be “useless to Percepta and are by now stale regardless.”
The February 2026 Preliminary Injunction
Judge Oetken issued a 41-page opinion on February 18, 2026 that split the outcome. He found Hirsh Jain and Radha Jain likely violated their non-solicitation agreements and that Cohen likely breached her confidentiality obligations, citing evidence of recruiting activity and Cohen’s downloading of confidential marketing, workflow, and healthcare customer data to her personal phone.8Times of India. US Judge Blocks Former Employees From Poaching The court ordered the defendants to stop recruiting Palantir employees and barred Cohen from further breaches of her confidentiality agreement, finding Palantir would suffer “irreparable harm” if the conduct continued.9Bloomberg Tax. Ex-Palantir AI Workers Blocked From Poaching, Using Secrets
The court refused, however, to bar the defendants from working at Percepta. Judge Oetken held Palantir’s 12-month noncompete unenforceable because its reference to any “similar business” was “too amorphous” and “imprecise.” Because Palantir works across AI, analytics, software, and consulting, the judge concluded the clause could sweep in a huge range of employers. He observed that the agreement was so broad it would theoretically leave a departing employee free to work only as “a janitor or Chief Operating Officer” elsewhere.8Times of India. US Judge Blocks Former Employees From Poaching The opinion was initially sealed for redactions and released publicly in March 2026.10Law360. Ex-Palantir Engineers Cleared to Return to Work for Rival
The May 2026 Order Sending the Case to Arbitration
On May 12, 2026, Judge Oetken ruled that Palantir’s underlying claims must proceed to arbitration rather than remain in federal court. Palantir had argued that its request for injunctive relief fell within an exception to the arbitration agreements the employees had signed. The judge rejected that reading, finding the exception applied only to lawsuits brought to enforce the arbitration agreement itself, not to employment claims like these. As of mid-2026, it was not publicly confirmed whether arbitration had formally commenced or which forum would administer it.11Reuters. Palantir Must Arbitrate Claims Against Ex-Staffers Who Formed Rival Firm
What the Rulings Mean for AI Industry Noncompetes
The split outcome is a useful marker for how New York federal courts are treating restrictive covenants in the AI sector. Judge Oetken enforced the narrower promises — non-solicitation of employees and confidentiality — but struck down the broadest one, the noncompete, because its language reached too far. Courts applying New York law will enforce reasonable restrictive covenants to protect legitimate business interests, but agreements that sweep across “similar” businesses without meaningful limits risk being invalidated outright rather than trimmed by the court. Precise, specifically drawn non-solicitation and confidentiality clauses fared better here than catch-all noncompete language covering an entire industry.
The February ruling did not resolve the merits of Palantir’s trade secret and breach claims. Those now sit with an arbitrator, and the preliminary findings on solicitation and confidentiality were made under the “likelihood of success” standard that governs injunctions, not a final judgment on liability.