TCS gets some relief after court in US trims discrimination lawsuit

Eight months after a lawsuit was slapped on IT major Tata Consultancy Services- (TCS) for discrimination and violation of visa norms, a court in New Jersey has trimmed the lawsuit by tossing one of the three claims made by the complainant. The other two claims will move forward.

In December 2022, the country’s largest software exporter was accused of having a systematic pattern of discriminating against non-South Asian and non-Indian applicants and employees, by a former employee. Shawn Katz, the complainant, alleged that the discrimination was with respect to hiring, staffing, benching, termination and promotion decisions, and that this policy is implemented top-down at the company.

Katz worked for the company for nine years before being let go after he was on the bench and could not find other projects.

“TCS’s discrimination is systemic and ongoing, and impacts non-South Asians and non-Indians across the company, as well as applicants, who are disfavored in TCS’s hiring, staffing, promotion, and termination/retention decisions,” the complaint read. His complaint said that the company was looking to maximise its benching, hiring and termination policies to maximise visa holders or those on an H-1B work visa in the US, which is sponsored by the employer. He also alleged that TCS prioritised visa holders for TCS positions.

Katz had filed a class action lawsuit, referring to a group of people who have suffered the same or similar injury.

Katz alleged that he was facing disparate treatment on the basis of race, and unlawful employment practices on the basis of race and national origin. He sought injunctive and declaratory relief as well as damages. In response, TCS file a motion to dismiss, which Katz opposed.

As per the order by Justice Brian R Martinotti in the New Jersey District Court this month, TCS had said that one of Katz’s disparate impact claims, as well as claims for injunctive relief, should be dismissed. “Additionally, TCS asserts all of Katz’s claims should be dismissed to the extent they are based on an alleged failure to hire or place,” as per the order.

Disparate impact requires that an employer cannot use a facially neutral policy — one where the policy does not discriminate on its face — but nevertheless causes a significant discriminatory hiring pattern.

The court did not move forward with Katz’s disparate impact claim under Title VII (equality before law) because he was unable to establish a ‘prima facie’ case for it.

However, the court said the allegations sound like disparate treatment, rather than disparate impact. Disparate impact refers to discrimination that is unintentional, and disparate treatment refers to intentional discrimination.

“TCS’s benching, hiring, and termination policies to maximise visa-holders, who Katz alleges are “almost exclusively South Asian,” followed by TCS prioritizing those visa-holders for TCS positions, are not facially neutral policies because Katz …alleges TCS implements these policies to further a preference for South Asians and Indians,” the order states.

Katz had also asked for injunctive relief. TCS in its motion said that Katz is not seeking reinstatement or being harmed by any action of TCS, but Katz, in an amended complement, sought reinstatement and sought injunctive relief on behalf of the class. The judge allowed this motion to move forward.

For the third charge, the IT major’s motion to dismiss all claims based on discriminatory hiring or placement was denied.

In response to queries, TCS said, “As the matter is sub judice, we will not be able to comment.” Moneycontrol