Business Software

Judge Rules for Infosys in Whistleblower Case

In an opinion filed today, Alabama Judge Myron H. Thompson ruled that Palmer failed to prove his claims against Infosys-including breach of contract and fraudulent misrepresentation-under Alabama state law and therefore had no right to recover damages from the $6 billion outsourcing provider.

Palmer claimed he was harassed, threatened and eventually sidelined when he filed an internal whistleblower claim that indicating that Infosys was misusing U.S. work visas. Specifically, the judge noted that as an at-will employment, "absent a contract providing otherwise, [an] employee may be demoted, denied a promotion, or otherwise adversely treated for any reason, good or bad, or even for no reason at all."

The summary judgment means the case will not go to trial before a jury.

Whistleblower: Infosys Violated Visa, Tax Laws

The case put a spotlight on the IT outsourcing industry's use of temporary work visas to bring foreign-born professionals to work at customer sites in the U.S. Palmer presented evidence alleging that Infosys violated visa and tax laws to increase its profit margins, specifically abusing the U.S. B-1 business visitor visa to bring the outsourcer's Indian employees to perform software development, quality assurance and testing for U.S. clients.

According to Palmer's testimony before the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security last year, the B-1 visas were easier to obtain than the increasingly scrutinized H-1B worker visas. In addition, Palmer testified, B-1s did not have to be paid a prevailing wage, since visitors on a business visa are not supposed to be drawing a salary in the U.S. at all.

Palmer also reported these allegations to federal authorities. Infosys is under investigation by the Department of Homeland Security and a federal grand jury.

Threats Against Palmer "Deeply Troubling" But Not Illegal

Judge Thompson's opinion states that Palmer's brief spent "an inordinate amount of time addressing whether Infosys engaged in visa fraud" when the case did not in fact concern whether Infosys violated American immigration law.

The judge indicates that the threats that Palmer reported receiving since going public with his claims against his employer-such as a note Palmer says was affixed to his computer reading "hope your journey brings you death stupid American"-were the most worrisome part of the case.

"Without question, the alleged electronic and telephonic threats are deeply troubling. Indeed, an argument could be made that such threats against whistleblowers, in particular, should be illegal," Judge Thompson states in his opinion. "The issue before the court, however, is not whether Alabama should make these alleged wrongs actionable, but whether they are, in fact, illegal under state law. This court cannot rewrite state law."

Palmer continues to be employed by Infosys. According to his lawyer, Kenneth J. Mendelsohn, he has not been assigned to an active project since filing his whistleblower claim.

Neither Mendelsohn nor an Infosys spokesperson were immediately available to comment on the ruling.

Another lawsuit with similar visa fraud claims was filed by a former employee against Infosys earlier this month in California.

Stephanie Overby is a regular contributor to CIO.com's IT Outsourcing section. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.

Read more about h-1b in CIO's H-1B Drilldown.

Subscribe to the Daily Downloads Newsletter

Comments