A company that supplies thousands of workers for Silicon Valley’s technology industry and other Bay Area employers intentionally discriminated against non-Indian workers, a jury has found.
The jury verdict against Cognizant, founded in Chennai and now headquartered in New Jersey, came Friday in a class-action lawsuit that revolved around claims the firm abused the H-1B visa process. The visa is intended for workers with specialized skills, and Silicon Valley tech firms rely on it heavily to secure top talent and also to obtain workers for lower-level jobs via Cognizant and other staffing firms.
Three U.S.-born workers described in the lawsuit as “Caucasian” — Vartan Piroumian of California, Christy Palmer of Arizona and Edward Cox of Texas — sued Cognizant in U.S. District Court in Los Angeles in 2017. Another plaintiff described as Caucasian, Jean-Claude Franchitti, a green card holder from France, joined as a plaintiff later.
The lawsuit claimed Cognizant ousted many non-Indian workers by first taking them off projects and “benching” them without work, then keeping them benched until firing them in accordance with a company policy.
Cognizant said Monday it was “disappointed with the verdict” and would appeal.
“We provide equal employment opportunities for all employees and have built a diverse and inclusive workplace that promotes a culture of belonging in which all employees feel valued, are engaged and have the opportunity to develop and succeed,” the company said. “Cognizant does not tolerate discrimination and takes such claims seriously.”
Federal government data show Cognizant obtains H-1B visas for hundreds of Indian citizens to work in Bay Area jobs per year, said Ron Hira, a Howard University professor who studies the visa and testified for the plaintiffs in the lawsuit. Data from 2023 show Cognizant placed H-1B holders at Bay Area employers ranging from Google, Meta and Apple to PG&E, Kaiser Permanente and Walmart.
The H-1B has become a political flashpoint. Critics point to abuses including replacement of U.S. workers by visa holders, while the tech industry lobbies to boost the annual cap on new visas past 85,000.
The most recent research, by the Bay Area Council, showed nearly 60,000 foreign citizens on the H-1B were approved to work for Bay Area companies in 2019. The vast majority are from India.
Because of Cognizant’s preference for Indian workers, it seeks as many visas as possible, and the company has become a top recipient of H-1B visas by submitting visa applications tied to “jobs that do not exist,” the lawsuit alleged.
Rules for the H-1B require companies applying for it to have a job the visa holder will fill, Hira noted. Obtaining visas for non-existent jobs “crowds out companies that are looking for the one real worker that they want,” Hira said.
Piroumian, a highly experienced software engineer, started at Cognizant in 2012 and “was repeatedly removed from positions servicing Cognizant clients prematurely and replaced with less qualified, Indian … employees,” the lawsuit alleged. In mid-2017, the company “benched” him, then, following company policy to terminate employees after more than five weeks on the bench, fired him six weeks later, the lawsuit claimed.
Cox, also with decades of experience, started at Cognizant in 2014, and was benched in January 2017, the lawsuit said. He interviewed for several open roles in the company, but “less qualified Indian … employees were selected,” and he was fired while benched that April, the lawsuit alleged.
Palmer, hired in 2012, had not been benched, but also was “repeatedly removed” from projects and replaced with Indian workers, including after a forced transfer from Tucson, Arizona to California, and after another transfer requested by Cognizant from California to Phoenix, the lawsuit alleged.
Palmer also claimed she was deliberately excluded from most team meetings, and the few times she was invited, Indian managers would turn their backs on her when she spoke, the lawsuit claimed. She alleged that discrimination and a hostile work environment forced her to resign in 2016.
Franchitti, with a PhD in computer science, was hired in 2007, and in his nine years at Cognizant as a director an executive, witnessed the company’s preference for Indians on visas, the lawsuit claimed. When he secured new business for the company, his manager “would staff the client projects with visa-holding employees from India, rather than non-Indian members of Mr. Franchitti’s group who were already in the U.S. and available for this work,” the lawsuit alleged.
Franchitti was fired in 2016 after complaining repeatedly that he was being made to sign hundreds of fraudulent invitation letters supporting H-1B visa applications for jobs that didn’t exist, the lawsuit claimed.
The allegedly fraudulent letters are part of Cognizant’s scheme to secure vast numbers of H-1B visas and build a “robust inventory” of Indian nationals to be placed in U.S. companies when opportunities arise, the lawsuit alleged.
“These individuals are given first — if not exclusive — preference for new U.S. positions, as they become available,” the lawsuit claimed. “Non-Indians are disproportionately relegated to the bench, as jobs are given to … Indians.”
Most of Cognizant’s U.S. workforce are on visas, the majority in jobs for which there is “an abundance of capable and qualified U.S. workers who can do the work and want the jobs,” Hira said.
The jury recommended that the court hit Cognizant with punitive damages.
