Outsourced and Fired, IT Workers Fight Back

molina
On the day they were fired early last year, about 40 IT employees at Molina Healthcare Inc. had been gathered in a conference room for what they were told would be a planning meeting. At the same time, laptop computers were being collected from the assembled workers' desks.

During the meeting, Molina's then-CIO, Amir Desai, informed the workers that they were being laid off for financial reasons, "not because of [their] performance."

The layoffs came amid rising tensions over a number of issues, including the expanding role of an offshore IT contractor at Molina.

The workers raised the concerns with Desai during the meeting.

"I felt they were expecting us to be asking questions about Cobra and unemployment and all that," said Bonita Shok, one of the laid-off IT employees. "Instead, we were being quite confrontational about why they are laying us off and keeping all these H-1B workers."

"I have never experienced a group of employees who were so angry," said a human resources manager who was in the meeting to answer questions from employees about benefits. The HR manager asked not to be identified.

"They felt their work was being offshored -- they were angry at the H-1B employees that were being hired," said the longtime HR industry veteran who had been hired to execute the IT layoffs at Molina, a managed health care provider that serves Medicaid and Medicare recipients. "I [had] never felt the backlash that I felt from Molina employees."

The employees, who lost their jobs in January 2010, never got answers to their questions about the company's IT outsourcing strategy.

Instead, 18 of them filed a lawsuit in California state court earlier this year against Molina, its CIO at the time and its outsourcing contractor, Cognizant Technology Solutions.

The HR employee, who was later laid off as well, is a witness for the plaintiffs in the case.

The plaintiffs contend, among other things, that they are victims of discrimination due to national origin. The lawsuit charges that the employees were fired because the companies sought to employ people "whose national origin, race and/or ethnicity was exclusively Indian," and didn't want to employ Americans or green-card holders.

Molina contends that the lawsuit is grounded in "falsehoods and malicious gossip." Cognizant has said that the lawsuit is without merit and that it "will vigorously contest it."

Desai, through his attorney, says the lawsuit is itself guilty of "an unfair discriminatory bias." Desai himself has since left Molina.

Of the workers who are part of this suit, 10 brought an earlier claim against Molina that was settled in mediation before this case was filed. The mediation agreements did not settle the case for all the workers and did not include current lawsuit defendants Cognizant and Desai.

While what happened at Molina is still in dispute, job displacement because of offshore outsourcing is a fact of life in today's IT workplace. While there are no government numbers that detail its extent, the broad outlines of the story told by the Molina workers should be familiar to other IT workers.

Outsourcing engagements often start when offshore IT services companies bring in workers, typically on H-1B or L-1 visas, to learn a company's IT processes. Then the work is moved overseas. Molina employees contend that's what happened to them.

James Otto, the attorney representing the Molina employees in the lawsuit, claims that about 200 visa-holding workers have been brought into the company.

Otto has told the former Molina IT workers that such activity is a form of segregation. "Today you're being segregated based on your national origin," he said.

Several years before the layoff, there were about 70 or 80 IT employees at Molina, according to a group of more than a dozen former Molina IT workers who met with Computerworld late last month. Many of the former Molina workers asked that their names not be published.

At that time, Cognizant had a small presence at the firm, mostly to supplement internal work. The employees said they felt no threat at the time. In fact, said Shok, "there was a feeling of camaraderie on the team."

But beginning around 2007 things started to change.

Most of the immediate IT managers were either laid off or quit, according to the employees. At the same time, the number of contractors increased. The lawsuit alleges that Desai and his management team "hire[d] and promote[d] only Indian nationals to management positions."

Desai, through his attorney, says the allegation is false. Of the six IT managers reporting to him, two were of Indian descent, he said.

"My client is dismayed both at the false allegations in Mr. Otto's lawsuit and its ethnically inflammatory undertone suggesting that Mr. Desai is biased against Americans and favors Indians solely because he is 'of Indian descent,' " wrote Desai's attorney, Edward Raskin in an email to Computerworld.

Raskin also points out that Desai was born in the U.S. and graduated from a U.S. university. He says the lawsuit avoids certain facts. "For example, some of the employees who lost their jobs at Molina were 'of Indian descent,' which contradicts Mr. Otto's suggestion that Mr. Desai and the company only favored Indians," he said.

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