The Score in the Courts: Indians - 2, the Rest of Us - 0

Two American courts — working separately from each other — dealt with foreign worker questions yesterday and both came down against resident workers.

The Indian outsourcing firms in these cases had a different score, winning one and more or less losing the other. Here's what's happening:

In Florida, a federal judge ruled against the Walt Disney workers (citizens or green card holders) who had sought to overturn their layoffs so that Disney could turn its IT work over to two Indian outsourcing firms and to their H-1B workers.

In this case, the resident workers lost and the outsourcing companies (and Disney) won. The federal judge ruled that the workers, represented by Florida attorney Sara Blackwell, "had failed to support claims they [the employers] conspired to replace Disney employees with foreign workers under the Racketeer Influenced and Corrupt Organizations [RICO] Act."

The outsourcing firms in this case are Cognizant and HCL. They argued that since they never had any American workers they could not be found to be discriminating against them. Though the judge does not seem to have thought so, it is a little like the old story of the parent-murderer asking for leniency on the grounds of his status as an orphan.

Blackwell's use of RICO in this case was unusual, if not novel, but it did not seem to work, at least not this time; there may well be an appeal.

The other case, in New York, was more complicated. It pitted one Indian worker (an L-1) against the outsourcing firm, in this case Accenture. (In the Florida case the H-1B workers did not participate in the court process, but their interests were, in effect, represented by their employers.)

Accenture, a spinoff from Arthur Anderson, once a large, global, but failed accounting firm, was first headquartered in Bermuda and then in Ireland for tax-avoidance purposes. According to Wikipedia, the largest number of its workers is in India and it is well-known to be an extensive user of the H-1B program in the United States.

In this case, and I have not seen this before, an Indian worker complained that U.S. workers employed by Accenture were paid better than the workers from India (which is of course why they were hired at bargain rates in the first place).

The worker, Elton Kent, according to a Law360 article (behind a paywall) "was transferred from India" (on L-1 status) to the United States as a "senior software engineer" in September 2012. He subsequently resigned when he discovered that some U.S. citizens in comparable jobs were being paid better and had better fringe benefits.

The Law360 report, as is so often the case, fails to note the worker's immigration status or his current location (India or the United States?). This is a major oversight because while there are some meager worker protections in the H-1B program, there are none in the L-1 (intra-company transferee) program.

On a more cheerful note, the report was that the case was settled for "up to $500,000". All too frequently such settlements are kept quiet, and all one learns is that there has been a settlement.

I said earlier that resident workers lost this one, as they clearly (if indirectly) did in the short-run. But maybe, just maybe, making L-1 workers a little more expensive, as this case may do, will work to the long-term advantage of resident workers competing with them. That, of course, is a matter of unanticipated consequences — neither Mr. Kent nor his lawyer had this in mind when they filed the case. (This was filed as a class action suit on behalf of other underpaid Indian workers, but how it benefits that class is not at all clear.)

Accenture clearly lost, but half a million is a mere tap in the general vicinity of the wrist for this massive operation.