Employee Litigation Against Tata Gets Class Action Status

Two employees of Indian outsourcer Tata Consultancy Services (TCS) have won class action status for a lawsuit alleging that the company made deductions from their wages in breach of their contract while they were working in the U.S. A judge in the U.S. District Court for the Northern District of California granted their suit class action status on Monday.

Top Indian outsourcers send a large number of employees recruited in India to work on client projects in the U.S., leading potentially to allegations of misuse of visas and exploitation of workers.

In this case, the two former employees, who were not U.S. citizens, alleged in a complaint against TCS and parent company Tata Sons, that the employer uniformly breached the standard employment contract for its employees by forcing all employees who were not U.S. citizens to sign over their federal and state tax refunds to Tata, and by deducting their Indian salary from their compensation, according to a statement from Lieff Cabraser Heimann & Bernstein, the employees' counsel.

Tata is also said to have deprived its employees in California of earned wages and accurate wage statements in violation of the California Labor Code.

Judge Claudia Wilken of the U.S. District Court for the Northern District of California on Monday certified a national class that may prosecute the plaintiffs' breach of contract claims. The class has been defined as "all non-U.S. citizens who were employed by Tata in the U.S. at any time from February 14, 2002, through June 30, 2005, and who were deputed to the U.S. after January 1, 2002."

The judge also certified a similar class for Tata employees in California during the period, allowing them to prosecute some of the plaintiffs' claims.

A nationwide class action lawsuit was filed in February 2006 by Lieff Cabraser Heimann & Bernstein, but Tata filed for the dismissal of the case on the ground that it had to be arbitrated in India.

TCS said on Tuesday that it had received the order of the court, but added that it is only on one procedural matter and does not address the merits of the case. TCS said it continued to believe that the court would find the plaintiffs' claims without merit.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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