TCS wins clean chit in anti-American bias lawsuit: All you need to know

By Elton Gomes

In a victory for the Indian IT outsourcing industry, a California jury unanimously sided with Tata Consultancy Services (TCS), and said that the Indian consulting major has not discriminated against non-South Asian workers in the US as alleged in a lawsuit.

The unanimous nine-member jury found in an Oakland, California, court Wednesday that TCS did not have a “pattern or practice” of intentionally discriminating against non-South Asian workers due to their race or national origin.

The case was the first of several accusing India’s large IT firms of hiring bias in the US to go to trial. HCL Technologies Ltd., Infosys Ltd, and Wipro Ltd. are also facing similar claims. “This is a shot in the arm for the industry, which has not seen anything positive come out on the U.S. visa regulation front for some years,” said Anurag Rana, an analyst with Bloomberg Intelligence, BloombergQuint reported.

TCS has almost 30,000 employees in the US, which makes it the largest local employer among Indian IT services firms. Since 2011, plaintiffs claimed that TCS had fired 12.6 percent of its non-South Asian staff compared to less than 1 percent South Asians.

In December 2017, a local US court had dismissed a similar lawsuit against TCS after the company was accused of discriminatory practices against local Americans in hiring for coding jobs.

Why was the lawsuit filed?

The lawsuit against TCS was filed in 2015 by an American IT worker who claimed he was subject to “substantial anti-American sentiment” within TCS and was ultimately terminated within 20 months despite having almost 20 years of work experience.

A Bloomberg report said that the jury was expected to be shown statistical evidence that the odds of race and national origin not being a factor in TCS’s termination decisions are less than one in a billion.

This was because, since 2011, the company fired 12.6 percent of its non-South Asian workers in the US, compared with less than 1 percent of its South Asian employees, according to the complaint.

The ex-employees who had filed a lawsuit had accused TCS of a “systematic pattern and practice of discrimination” by favoring Indian ex-pats and visa-ready workers from India for positions in the US. Such an alleged practice has resulted in a workforce that’s almost 80 percent South Asian, which is far greater than the 12 percent representation of South Asians in the US IT workforce, according to the complaint.

How did TCS attorneys respond?

TCS attorneys argued that the company had no incentive to discriminate, and had spent millions of dollars on developing a local talent pool in the US. TCS further stated that employees were terminated because they were unwilling to move to cities in the US, where TCS needed more engineers.

“We have always maintained the claims made in this case were baseless, and we are gratified that the jury agreed,” Ben Trounson, a spokesman for TCS, said in an emailed statement after the verdict.

“The decisions we make about the hiring and retention of employees are based purely on their abilities and fit to serve our clients’ specific needs,” Trounson added.

What did TCS say?

In a statement, TCS asserted that regardless of background or national identity, it will continue to invest in its employee. “Irrespective of their background or national origin, we will continue to invest in our people, provide ongoing digital training and empower them to succeed at TCS and, more importantly, enable our customers’ success.

“Skilled American workers are critical to the success of the US business and to the nation’s economic success, and we will continue to invest heavily in the country’s workforce, academic alliances and our extensive youth STEM education initiatives,” TCS said in a statement.

How will the verdict help Indian outsourcing?

The verdict comes as a major victory for the Indian outsourcing industry, whose business model depends heavily on exporting engineers to the US. The verdict also comes as the Trump administration is doubling down on immigration and its tough stance is impacting companies in terms of hiring and retaining foreign workers on the H1B work visas, which is the most-sought after among Indian IT professionals.

Elton Gomes is a staff writer at Qrius