A Different Kind of Discrimination

An IT worker says that India-based Infosys discriminated against her and other U.S. job applicants by misusing guest worker visas to hire workers from South Asia.

Tuesday, August 20, 2013
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A Wisconsin woman has sued global software company Infosys, saying it has discriminated against her and potentially thousands of other rejected job applicants by hiring workers from South Asia countries with foreign worker visas at lower wages.

Brenda Koehler is seeking class-action status for her lawsuit against Infosys, which has more than 130,000 employees worldwide and headquarters in India.

"There aren't a lot of cases like this. It certainly raises some great issues," says Merrick Rossein, professor at CUNY School of Law and a consultant on HR issues.

"It really looks like a wakeup call, but it's hard to know if there will be broader implications" until defense motions are ruled on, says David Grunblatt, a Newark, N.J.-based partner at Proskauer, and head of its immigration practice group.

Koehler, who has a master's degree and 17 years of varied IT experience, interviewed in April 2012 for a position with Infosys for which she says she was well-qualified. Infosys later hired somebody from Bangladesh.

Koehler's lawsuit contends that as many as 90 percent of Infosys's roughly 15,000 U.S. employees are foreign nationals, mostly from India. Yet only 4.8 percent of the U.S. population is Asian, and only 1 percent to 2 percent is from South Asia. The complaint notes that an IT trade group, the Association of Information Technology Professionals, said that only 2 percent of its membership in 2007 was of Asian ethnic origin. Koehler believes Infosys applicants in the United States mirror those demographics.

"The gross disparity between the demographics of the applicant pool and Infosys's workforce is the result of intentional discrimination against individuals who are not of South Asian descent," Koehler's lawsuit alleges.

Infosys declined to comment for this story but denies any wrongdoing, saying it is an equal-opportunity employer.

"We look forward to addressing this matter in court, not in public venues where facts can become mixed with rumor, opinion and speculation," the company said in a statement.

"[The case] sounds very convincing [based] on the statistical data [the plaintiffs] have," Grunblatt says. "It's a matter of proving it."

Rossein also finds the statistics intriguing. "The strength of her evidence, from my reading of the case, will be a statistical evidentiary case."

Infosys has chosen to disproportionately employ workers with H-1B visas that allow them to remain in the United States up to six years - even longer if they are granted an extension -- in order to pay lower wages, the lawsuit alleges.

H-1B visas are intended to allow companies to bring a restricted number of foreign workers to the United States to perform specialized jobs for which there are insufficient "local" workers. The law requires employers to certify that they will pay them the higher of  either the prevailing wage for the specific job where the employee will work, or the wages paid by the employer to any non-immigrant doing the same job.

IT companies are the largest users of guest workers, and workers from India accounted for 64 percent of all H-1B petitions in the fiscal year that ended Sept. 30, 2012, according to the Department of Homeland Security. Some 262,569 H-1B petitions were approved, and 61 percent of them were for computer-related occupations.

Many U.S. employers complain there is a talent gap of skilled STEM workers - science, technology, engineering and math. A report released in May by the Economic Policy Institute concluded those claims are overblown.

The lawsuit also maintains that Infosys has abused the B-1 visa program, which allows foreign workers in the country for limited business tasks such as meetings and consulting with colleagues. Infosys has allowed workers with these visas to do long-term jobs, the lawsuit alleges.

It's not unusual for workers holding H-1B visas to file complaints with the Department of Labor over wages and working conditions, Grunblatt says. But it is "relatively rare" for U.S. workers to sue over alleged misuse of the program. Koehler's discrimination claim on top of that makes her lawsuit even more novel, he says.

Koehler's lawsuit cites a theory of liability under Title VII of the U.S. Civil Rights Act called "disparate impact," which is harder to prove than disparate treatment or a hostile work environment because its impact is less tangible, says Eric Meyer, partner in the labor and employment group at Dilworth Paxson in Philadelphia.

When there is disparate impact, even a seemingly neutral employment policy may discriminate against a protected group under Title VII - in this case national origin - if that class is disproportionately excluded from job opportunities. If that's shown to be the case, the employer "must show it did what it did out of a business necessity," Meyer says.

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"The basic standard is there's an insufficient cohort of American nationals and [qualified workers] are available elsewhere," Rossein says.

Employers also need to be aware of other issues that can arise such as paying H-1B workers correctly and properly classifying them. The Department of Labor posts prevailing wage scales that can vex companies because they often seem at odds with what the market pays, Grunblatt says. Classification problems can arise if a guest worker is paid at a lesser rate than his experience calls for.

Koehler's effort to have her lawsuit certified as a class action could be difficult, Rossein says. "It's fairly onerous to get class certification," he says, especially in the aftermath of a 2011 U.S. Supreme Court decision in which the court rejected an enormous class-action lawsuit against Wal-Mart. In the suit, as many as 1.5 million female workers sought billions of dollars for alleged discriminatory pay and promotions decisions.

Justice Antonin Scalia, writing for the majority, noted that Wal-Mart had an expressed policy barring discrimination and gave individual Wal-Mart managers substantial discretion at their stores. That, he said, "is just the opposite of a uniform employment practice" needed for a class action.

"[Koehler] is going to have to show the employer has a centralized system of hiring and that it makes decisions from a central place," Rossein says.

Koehler isn't the first person to accuse Infosys of abusing the use of short-term visas. In August 2012, a whistleblower lawsuit filed by Jack Palmer, a U.S. national who was employed as a consultant to the company in Alabama, was dismissed. Palmer alleged he was harassed at work after he questioned the company's alleged misuse of visa programs.

"Infosys had a bull's eye on its back" because of issues raised in that case, Grunblatt says. The federal government began a criminal investigation of Infosys' foreign visa practices. And last December the company settled the California lawsuit of a former employee who said that he, too, had been harassed after questioning Infosys's visa practices.



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