Espionage Thriller or Fair Competition? Palantir v. Jain and the AI Talent War

To what extent can noncompetes stop AI engineers from building a rival?

When two key Palantir engineers left, Palantir says the engineers spent the next year stealthily building Percepta, an AI-integration startup funded by General Catalyst and pitched as a “version” of Palantir.¹

In turn, Palantir sued in S.D.N.Y., alleging the two engineers breached one-year, job-function noncompetes; walked out with confidential materials; and used Palantir’s playbook to jump-start Percepta. The parties stipulated to a TRO that benches the two engineers from Percepta while the court moves toward a January 27, 2026, PI hearing.²

Palantir is likely to get some injunctive relief specific to Percepta but not an open-ended, global benching of the departed engineers. For digging deeper, all of the opinions cited in this article are available for free on Midpage.

The Alleged Facts Audition as an Espionage Thriller

What follows is Palantir’s version of events, drawn from its complaint and motion papers; the defendants dispute these allegations.

The first of the two defendant engineers to resign, Radha Jain, worked as an AI Product Engineer on Palantir’s flagship AIP products and had access to core source code, internal demos, and customer workflows. The second engineer, Joanna Cohen, a Forward Deployed Engineer turned Healthcare Lead, architected some of Palantir’s key healthcare deployments. The two resigned without saying where they were going, mentioning only an “AI startup.”

The day after resigning, Cohen allegedly Slacked herself confidential Palantir documents and accessed them on her personal phone. The documents included a healthcare revenue-cycle diagram, an internal demo-planning framework, and a draft AIP statement of work. Cohen also downloaded marketing content in non-healthcare industries.

Percepta emerged publicly in October 2025, when General Catalyst announced it had been “quietly at work” for roughly a year building an AI-integration platform in the same verticals Palantir targets. The complaint notes that nearly half of Percepta’s team—including its CEO, CTO, Head of Health, Jain, and Cohen—previously worked at Palantir. Palantir’s narrative is that Percepta is a “copycat” designed to shortcut a decade of its investment.

Broken Promises and Temporary Relief

Palantir’s claims rest on proprietary information agreements signed by the two engineers. The engineers agreed to keep confidential and return upon termination any Palantir “Proprietary Information.” They also agreed to not perform, for one year, their Palantir job functions at a competing business and to not solicit, for two years, any Palantir customer or employee. A tolling clause pauses those periods during any breach.

Palantir sought emergency relief and, rather than litigate an immediate hearing, the parties stipulated to a TRO entered on November 3, 2025. The order effectively enforces the proprietary information agreements on an interim basis. The two engineers cannot work for Percepta or perform their former functions for similar competitors, must not use or disclose Palantir “Proprietary Information,” and must image, return, and delete Palantir material on personal devices and accounts. The engineers are also subject to expedited discovery, including third-party subpoenas to Percepta and General Catalyst. A credit provision in the TRO recognizes “time-served” by the engineers: Absent Palantir showing a TRO violation, any noncompete period later-imposed by the court will be shortened by the number of days the TRO remains in force.

The Legal Frame: New York Noncompetes and Federal PI Standards

Under New York law, a noncompete is enforceable only if it is reasonable in time and scope; is necessary for protecting the employer’s legitimate interests like trade secrets or customer goodwill; does not harm the public; and does not unreasonably burden the employee. Spotlight Ticket Management Inc. v. Daigle, No. 1:23-cv-10035 (S.D.N.Y. Aug 28, 2024). Cases like Spotlight Ticket have enforced covenants for key employees while trimming overbroad restraints. Id. At the PI stage, Palantir must show irreparable harm plus either a likelihood of success on the merits or “serious questions” with the balance of hardships tipping in its favor, along with public-interest considerations. Medequa LLC v. O’Neill & Partners LLC, No. 1:21-cv-06135 (S.D.N.Y. Aug 6, 2021).

Palantir argues the one-year, job-function noncompete is narrow; that the departed engineers had access to the “crown jewels” of its AIP products, including internal demo environments and configuration templates; and that Percepta is a near-term competitive threat because it markets itself as a “version” of Palantir with overlapping people and use cases.³

How the Benched Engineers Might Push Back

If Palantir’s story is about insiders turning its playbook against it, the defense story will be about overreach.

1. The noncompete is broader than New York will tolerate. The defendant engineers will likely argue their noncompetes amount to a de facto industry-wide timeout. For a year, they are barred from performing their Palantir job functions for any “entity engaged in the same or similar business,” including companies that develop and sell analytical software. In a market where many AI and analytics companies arguably fit that description, the covenant impermissibly prohibits competition. Flatiron Health, Inc. v. Tempus, Inc., No. 1:19-cv-08999 (S.D.N.Y. Mar. 20, 2020).

2. Irreparable harm and trade secrets require more than suspicious optics. Palantir has strong facts on access: Jain’s “crown jewels” role on AIP and Cohen’s Slack-to-phone transfers of a healthcare revenue-cycle diagram, internal demo framework, and draft statement of work the day after she resigned. But defendants will stress what Palantir has not yet shown—that Percepta is actually running Palantir code or that the Slacked materials have been baked into Percepta’s product. With the TRO’s non-use and forensic provisions already in place, they’ll argue that whatever risk existed at filing is now heavily mitigated. See Free Country Ltd. v. Drennen, 235 F. Supp. 3d 559 (S.D.N.Y. 2016).

Why Litigators Should Watch This Case

For litigators, Palantir v. Jain is an early test of how far a New York court will go in enforcing noncompetes and tolling clauses when core AI product talent leaves for a rival. It also provides a drafting case study: job-function-based noncompetes instead of blanket industry bans, explicit credit for TRO time to soften tolling, and expedited discovery aimed at code, customers, and deals. The restrictive-covenant opinions cited in this article are available for free on Midpage.

1. Compl., Palantir Techs. Inc. v. Jain, No. 1:25-cv-08985 (S.D.N.Y. Oct. 30, 2025), https://storage.courtlistener.com/recap/gov.uscourts.nysd.652097/gov.uscourts.nysd.652097.1.0.pdf.

2. Stipulated Temporary Restraining Order, Palantir Techs. Inc. v. Jain, No. 1:25-cv-08985 (S.D.N.Y. Nov. 3, 2025) (ECF No. 22), https://storage.courtlistener.com/recap/gov.uscourts.nysd.652097/gov.uscourts.nysd.652097.22.0.pdf.

3. Pl.’s Mem. of Law in Supp. of Its Appl. for a Temporary Restraining Order, Preliminary Injunction, & Expedited Discovery, Palantir Techs. Inc. v. Jain, No. 1:25-cv-08985 (S.D.N.Y. Oct. 30, 2025) (ECF No. 7), https://storage.courtlistener.com/recap/gov.uscourts.nysd.652097/gov.uscourts.nysd.652097.7.0.pdf.