As Settlement Question Looms, Attorney Demands Apology from Infosys

Don Tennant

In the wake of a federal judge's denial of Infosys' motion to compel arbitration in the visa fraud case brought by Infosys employee and whistleblower Jay Palmer, the question of whether Palmer would agree to a settlement in the case rather than have it tried in federal court is looming. It's clear that any approach by Infosys to settle so it doesn't have to endure the discomfort of having its dirty visa and tax laundry aired in public is going to be met with some strict demands. The first demand: Apologize to Palmer.


I asked Palmer's attorney, Kenny Mendelsohn, if he expects to see the case tried in federal court, or if there's a chance it will be settled. Mendelsohn's response was unflinching. "If Infosys wants to settle," he said, "the first thing it needs to do is apologize to Jay."


Mendelsohn has been demanding that apology since July 26, when Infosys Chief Marketing Officer Paul Gottsegen branded Palmer as a liar in a statement he released in response to the damning testimony Palmer had submitted to a Senate subcommittee hearing on immigration reform earlier that day (see my post, "Infosys Whistleblower's Attorney Releases Incriminating Evidence"). Here's the full text of that statement:

The commentary submitted today by Jay Palmer (via Senator Charles Grassley) to the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security, is full of inaccuracies, exaggerations and falsehoods. Mr. Palmer is obviously intent on spreading his falsehoods about Infosys and our business practices as broadly as possible in order to advance his objective of getting as big of a payout as he can from the Company.


Here are the facts:


  • There is not, nor was there ever a strategy, scheme, or policy by the company to use the B-1 visa program to circumvent the H-1B visa program;
  • The company did not have a practice of sending unskilled employees to the United States on B-1 visas to do the work expected of skilled individuals in the U.S. on H-1B visas;
  • Mr. Palmer's complaints to the company were handled in complete accordance with our published procedures for handling whistleblower complaints and in compliance with the law;
  • The company did not retaliate against or mistreat Mr. Palmer in any way.


As for the rest of Mr. Palmer's commentary, it is rife with misstatements. However, we will not now take on a point-by-point rebuttal of his comments and instead we will leave that to the current litigation.


Infosys is a world class company providing critical technology-based business solutions for our clients throughout the world. We take very seriously our obligations under the law and specifically our responsibilities to comply with the immigration laws and visa requirements in all jurisdictions where we have clients whose needs we serve on a daily basis. We have a deep understanding that the Company's integrity and compliance with law must be uncompromised. To that end, we have made and may continue to make changes in our policies regarding immigration and visa requirements with the intent of having the absolute best practices in place.

Mendelsohn was absolutely incensed by that statement. He began to release some of the incriminating evidence he has against Infosys to vindicate Palmer, and said he would continue doing so until Infosys apologizes to Palmer for calling him a liar. Now it appears that the stakes are higher, and Infosys is between a rock and a hard place. If it wants to talk about settling the case, the first thing it has to do is apologize to Palmer. If it doesn't settle, the public will be able to scrutinize every sordid detail of the trial. Either way, the pain will be excruciating for Infosys.


Mendelsohn said he hasn't heard from Infosys since the arbitration motion was denied. I asked him what his next step is, and his response made it clear that he's eager to proceed:

There are a few procedural issues that will be decided very shortly. Then I plan on filing a Request for Production of Documents, which, by law, will require Infosys to produce internal records. Actually, Jay and I have been working on that request for some time, but we have not been able to file until this ruling [against arbitration] by Judge Thompson. I will also be contacting Infosys' clients and obtaining their documents and information. At some point I will depose current and former Infosys employees.

Finally, I asked Mendelsohn what Palmer's response was to the news that Infosys' motion to compel arbitration had been denied. He said the decision wasn't really a surprise:

The law was clear. However, Jay is pleased because we now can move forward. Although we have substantial evidence already, now that we can use the legal process we can obtain a lot more of Infosys' internal documents. And we know which ones to ask for.

It sounds to me like Infosys would be well-advised to start crafting that apology. My own advice would be to make it unreservedly heartfelt and remorseful. Mendelsohn is loaded for bear.

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Nov 11, 2011 1:37 AM Indian_tatti Indian_tatti  says: in response to Chamat

I am not pleased with the statement of Jay Lawyers.

Lawyers are know to trap opposition. In this case Jay will deserve big pay check and the rest will be followed by courts case which will involve immigration, border petrol, FBI also.

Infosys will be done by next year unless Infosys change its name and come with a new company.

I am very happy .

Nov 11, 2011 3:53 AM hoapres hoapres  says: in response to Indian_tatti

Infosys makes an offer so good that Palmer can't refuse.  I would not expect an apology from Infosys.

Nov 11, 2011 4:29 AM employe employe  says: in response to hoapres

As per the news reports I read, apparently the honorable Federal judge claimed in his ruling that ALL employment agreements are boiler plate which the employee can not - but agree to, since the clauses in employment agreement had been coerced out of the employee.

I just hope that this judgement will be used as ready precedent - otherwise it may appear that it was used for the purpose of targeting particular employers. 

It also means no employment agreement (including those in Federal service/ State service) which require mediation and agreement for any dispute are valid  (since of course it is a federal judge ruling and also all employees are in the same situation) and will require to go for trial - because the judgement cites as precedent.

How about other clauses in the employment agreement - are those also legally enforceable or not ? I think no - because all employment agreement / contracts - commercial contracts are boiler plate agreement. Can some one please provide me with the copy of the judgement or the link.

Nov 11, 2011 4:56 AM Don Tennant Don Tennant  says: in response to employe

Here you go:

Nov 11, 2011 8:00 AM Dolores Dolores  says: in response to employe

No one is required to go to trial if both sides agree to mediate. What is at issue here is Western contract law. Contracts are supposed to be voluntary, involve a meeting of the minds (both sides have the same information, no trickery), and not be unconscionable (not outrageous, a person cannot sell himself into slavery even if he wants to - it would be null and void as a contract). Coercion, deception, and unconcionability render a contract void.

Workers have rights that supercede the terms of such contracts as Infosys used because of the principle of unconscionability. To rule otherwise would leave companies free to coerce people to submit to cruel conditions by withholding a citizens' livelihood and render labor and occupational safety laws meaningless. A company cannot make a citizen agree to refrain from voting, to go without water for a week, and so on. That's why we have labor laws.

This in turn hearkens back to the Western concept of inalienable rights. Infosys cannot bar Jay from his right to legal recourse.

Infosys is in the process of learning that this isn't India, where the rich, powerful, and high-born can do what they damned well please.

Nov 11, 2011 8:14 AM Amit Arora Amit Arora  says: in response to Dolores

Infosys will be considering to pay Jay around billion dollar to settle case but now this case has become  more than just a visa fraud case.  If these organizations controlled by higher caste Hindus are allowed to continue then there will be no place for non-Hindus in IT and science.

Probably all IT organizations will suffer due to Infosys and I will not be wrong to think that this entire episode was from start  was run by federal agencies to check Indian IT companies not hiring Americans and Indian Managers outsourcing projects to India.

Nov 11, 2011 10:16 AM Pro Pro  says: in response to Don Tennant

Don, what happens to the DOJ case against Infy in case this one is settled? Will Infy or any other body shop be punished for their abuse of visas? Aren't these criminal cases, doesn't someone need to go to jail????

Nov 11, 2011 11:09 AM Rahul Das Shah Rahul Das Shah  says:

The company will be closed by December 2013.

Nov 11, 2011 11:35 AM IAmNumber813 IAmNumber813  says:

Jay Palmer and his lawyer's next big hurdle will be that Infosys's lawyers will begin playing hardball and insist that they sign a "confidentiality agreement" seeking to restrict what they can disclose in public. Infosys' lawyers will claim that all of their discovery documents are "trade secrets" or some other excuse and will attempt to withhold them until the agreement is signed. Jay's strategy could be to resist signing a restrictive agreement since they already appear to have a large cache of evidence (disclaimer: not a lawyer).

Palmer should go on the offensive and demand to take a full image copy of all of the key employees' (current/former CEO, CIO, CTO, HR, site managers, etc.) computer hard drives (office, laptops, etc.) for forensic examination (i.e., using Encase, etc.) which will contain evidence of emails discussing their B1/H1B/L1 visa strategies (or erased documents and emails). I'm sure there are several unemployed computer forensic experts that would be happy to volunteer their time/expertise to help with that part of the case.

Since the Infosys arbitration agreement was declared unenforceable, there's a good chance Infosys and other Indian bodyshops are looking at a feeding frenzy from other lawyers ($$$) throughout the country (i.e., claiming U.S. IT workers were displaced by fraudulent/unlawful methods, etc.). Infosys' insurance company is going to bail on them since they broke the law.

"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

Japanese Admiral Isoroku Yamamoto after his attack on Pearl Harbor.

Nov 11, 2011 12:01 PM Chamat Chamat  says:

Only thing which is looming is compensation! I guess now Jay & folks realized that it might be get costly to keep it going and it is definitely beneficial to get some compensation instead. The sudden u turn for seeking apology is kinda cover up activity.

Nov 12, 2011 1:15 AM hoapres hoapres  says: in response to Don Tennant

>> Yes, the criminal investigation is ongoing, and is intense, according to my sources. <<

Only time will tell.

Infosys, Tata, etc. have too many friends and my bet is that the criminal investigation is going nowhere.

Nov 12, 2011 2:51 AM Don Tennant Don Tennant  says: in response to Pro

The federal government's criminal investigation of Infosys is separate, and is ongoing. Whether Palmer settles his civil case against Infosys is a separate matter. So yes, someone could go to jail.

Nov 12, 2011 2:57 AM Wakjob Wakjob  says:

I thought there was a criminal investigation against infosys by the feds? How does Infy settling with Palmer absolve them of criminal violations like visa fraud? Just because they apologize and even pay him doesn't mean the gov't should stop investigating their alleged crimes.

Nov 12, 2011 3:05 AM Don Tennant Don Tennant  says: in response to Wakjob

Yes, the criminal investigation is ongoing, and is intense, according to my sources.

Nov 12, 2011 5:01 AM IAmNumber813 IAmNumber813  says: in response to Don Tennant

This is going to get interesting. The Infosys executives can not plead the fifth in Palmer's civil lawsuit and the feds can use the discovery, testimony and evidence in his lawsuit to build their criminal case. If the Infosys executives refuse to testify in the civil case the federal judge can impose contempt of court sanctions, including fines and jail time until they do testify. This creates a very strong incentive for Infosys to settle the civil case to avoid testifying in a deposition (which will be captured on videotape) or at trial.

Another possibility is that the feds (or the state since they suffered lost tax revenue from the B1 visa holders) could intervene in (i.e., join) Palmers civil lawsuit:

"Courts will tend to allow an application to intervene if the applicant will provide a different perspective on the issues before the court, without expanding those issues."

A fed or state intervention in the civil lawsuit will probably make a settlement much more expensive (and expansive) for Infosys (i.e., the feds will require a multi-year consent decree requiring Infosys to keep their hands clean and/or a ban on using visas for a few years).

Nov 12, 2011 5:14 AM F?t???af?a ??�?? F?t???af?a ??�??  says:

Rahul Das Shah why will be closed?

Nov 12, 2011 8:16 AM harry harry  says: in response to Dolores

As an "ex-Infoscion", I must admit I am watching the progress of this case with perverse satisfaction. I do believe this case is necessary for companies like Infosys to realize what it means to operate in Western countries with strong rule of law and worker protections. They get away with murder in their HR practices in India because people are powerless to raise their voice and more importantly the courts are impotent or corrupt or both.

I hope Infosys gets a huge slap on the face on this one.

Nov 12, 2011 10:51 AM Hireamerican Hireamerican  says: in response to harry

In case you have not noticed, we have reached third world country status in the US. Companies are getting away with anything and everything.....Big blue itself brings folks on these visas to work here :P

Nov 12, 2011 12:32 PM hoapres hoapres  says: in response to IAmNumber813

Palmer takes the money and the case gets settled with a confidentiality agreement along with the DOJ dropping its investigation.

The end.

Now the above sounds cynical and I could be proven wrong but this stuff has been going on for decades and is not likely to stop.

Nov 13, 2011 2:08 AM hoapres hoapres  says: in response to hireamerican

Clearly I hope that something comes out of this but I doubt it.

This stuff has been going on for decades and I am afraid nothing is going to change. 

Infosys might get a slap on the wrist and the story gets buried.

Nov 13, 2011 5:14 AM IAmNumber813 IAmNumber813  says: in response to hoapres

The U.S. Attorney for the Eastern District of Texas (where the criminal investigation is taking place) has an extensive list of indictments, convictions and long sentences for white-collar crimes:

News and Press Releases

The U.S. Attorney's FBI background and his prosecution track record indicates that his Infosys' investigation will result in at least an indictment.

For extra credit, name the Republican governor of Texas who is currently running for President and who wants to appear tough on crime.

Nov 13, 2011 7:13 AM hireamerican hireamerican  says: in response to IAmNumber813

Infosys has too many friends in high places....this case will go nowhere :P

Nov 14, 2011 4:17 AM AnIndian AnIndian  says: in response to hoapres

'hoapres'  opined:  "Infosys might get a slap on the wrist and the story gets buried"

I hope not ! In India or other "Infosys-friendly" countries it might happen and it would be a dark day for Justice.

Since it is happening in the USA, I think Jay Palmer has a good chance of getting justice.

Ever since the RTI (Right to Information) became procedurally possible in India, whistleblowers have been harassed and killed or had to submit to pressure. The bullies I am referring to are just powerful private parties, powerful corporates and politicians and allied nexus.  The cases are too numerous to list.

I hope not. I get the feeling that Justice will be served in this case.

Nov 14, 2011 4:21 AM hoapres hoapres  says: in response to AnIndian

>> I hope not. <<

While I hope you are proven right, I think you will be sadly disappointed.

>> I get the feeling that Justice will be served in this case. <<

I don't.

This stuff has been going on for decades and what is most likely going to happen is that after a couple of weeks the story becomes old news resulting in no action being taken.

Infosys may pay a small fine which is considered a cost of business.

I told people that when the famous YouTube video came out on "Not hiring US citizens came out" that nothing would change and that is exactly what has happened.

Nov 15, 2011 9:41 AM hireamerican hireamerican  says: in response to hoapres

Yup, the infamous video where the lawyers were training HR people how to NOT hire americans......yeah..nothing happened then.....nothing will happen now....

The US is the new new India now :P

Nov 16, 2011 3:10 AM Inquiry Inquiry  says: in response to hireamerican

Do you have a link to the youtube video mentioned regarding the hiring of americans?

Nov 16, 2011 5:22 AM hoapres hoapres  says: in response to Inquiry

Nov 17, 2011 12:12 PM the B the B  says: in response to hoapres


infosys apologize to no one. they are most power company in world.  even Obama bow to infosys! that right politician Obama beg for infosys funding.  i predict government case to be dropped soon.

Nov 19, 2011 12:03 PM JoeB JoeB  says: in response to Amit Arora

"If these organizations controlled by higher caste Hindus are allowed to continue then there will be no place for non-Hindus in IT and science"

Or, to broaden the case....

If US corporations with IT departments controlled by Indians are allowed to continue then there will be no place for non-Indians in IT and science

Nov 23, 2011 12:38 PM joker joker  says: in response to Indian_tatti

I don't expect an apology coming out of and Indian company after it went this far to pain the whistleblower as the bad guy.  A typical Indian tactic is to let cases drag out in court so that the final decision comes 15 or 20 years later (but this is not easy to do in the USA system).  In the meanwhile they would create some good PR (there is "paid news" of India, just Google the term. Also NDTV has a strong connection with N.R.N. Murthy even though he himself is no longer on the board of NDTV. Times Of India and related publications are also a strong link). The other tactic is changing the name of company, as you mention. Or to move some people into retirement and away from the limelight.  If you attend a "brand building" workshop from one of the reputed B schools in India those are all present in the case studies they teach !

The Guardian  (UK) on India's "paid news":

Dec 5, 2011 12:56 PM Rohit Rohit  says: in response to Amit Arora

Your name says 'Amit' and but you are a pseudo-Hindu. You assume a hindu name to vent your frustration towards Hindus.

I agree with the last point "Indian Managers outsourcing projects to India". This is most appropriate for Cognizant. This company does not care any and simply starts thinking of offshoring projects from day one they get a client, irrespective of what the situation may be.


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