TCS claims partial victory in the US lawsuit
India’s largest information technology services company Tata Consultancy Services has claimed partial victory.
“In vindication of our position that TCS is an equal opportunity employer, the district court in California has denied class certification on litigation against the company alleging a pattern and practice of discrimination in hiring against people of non-South Asian origin. TCS will vigorously defend its position and expects a positive outcome,” the Tata group company said.
TCS has almost 30,000 employees in the US, which makes it the largest employer of locals among Indian IT firms. The court has allowed a petition by Brian Buchanan in respect to alleged discrimination in practices related to TCS’ “termination” of local employees as a class-action suit.
Buchanan, who was employed by South California Edison (SCE), a power utility, lost his job in 2015 after he trained engineers of TCS when his employer outsourced technology work to the Indian company.
Buchanan claimed he was not provided sufficient opportunity to apply for internal job openings at the Indian company after he lost his job at SCE. TCS counters the claim saying he never applied for specific positions.
TCS said it did not discriminate against any employee and was confident that it it would be able to defend its position at the trial. The next phase of the trial will begin on January 8. The court’s move to allow a class-action suit against TCS for discriminatory termination of local employees comes at a time when Indian infotech companies are facing protectionist measures by countries such as the US, UK and Singapore.
The Trump administration is reviewing the issue of H1-B visas. It plans to increase visa fees and has brought in measures to restrict spouses of visa-holders from working in the US.
Industry watchers remain confident that TCS will fight the anti-American classification not just because the potential payout will be huge but also because that will allow former employees of its clients to lay the blame for their situation on it.
“The infotech sector has been gravitating towards local hiring in the US for some time now. Given that it has many clients in the country, a class action lawsuit will allow a lot of disgruntled employees to target TCS on frivolous grounds,” said Ravi Menon, analyst, Elara Capital.
TCS is not the only Indian infotech company facing such trouble in the US. A similar lawsuit was filed against Infosys in June when a former employee accused the firm’s human resource policies of being discriminatory against non-South Asian employees. Analysts have noted that over the last couple of years Indian IT firms have ramped up local hiring and skilling initiatives in the US keeping in mind that a large chunk of their business is generated in this market.
Over the past five years TCS has registered a 57 per cent growth rate in its US employee base. With over 12,500 offers during this period, the firm is among the top infotech employers in that country. In an attempt to hire local talent, Indian IT firms have also established partnerships with local universities and education programmes to develop the requisite skill base.
Infosys and Wipro this year announced the opening of technology and innovation hubs across the US. Earlier in the year, Infosys said it would hire 10,000 people in the US over the next two years, while Wipro is planning to increase hiring in the US to make 50 per cent of its employees local by the end of this year.