As Trial Date Approaches, Infosys Will Have to Deal with Mainstream Media

Don Tennant

If an article in Wednesday’s Wall Street Journal is any indication — and I certainly hope it is — we can expect to see mainstream media coverage of Jay Palmer’s lawsuit against Infosys escalate in the final days running up to the Aug. 20 trial date. And it will be fascinating to see how Infosys deals with it.

The Journal’s Joel Schectman did a great job of encapsulating the potential fallout of the alleged visa fraud that prompted Palmer’s whistleblower action, and why U.S. companies that outsource work onshore to visa-dependent IT services providers should be worried. Here’s an excerpt from Schectman’s article:

The practice of improperly using business travel visas is common for outsourcers that send workers to client sites, said Phil Fersht, CEO of HfS, an outsourcing research firm. The H1B work visa–the appropriate document for longer-term onsite work–costs companies thousands of dollars per employee and the federal government has reduced their availability in recent years. “Outsourcers are trying to get staff to work an engagement as quickly as possible and they will work the system as much as possible,” Fersht said.

CIOs contemplating the hiring of on-site outsourcers can expose their companies to grave reputational harm if they don’t ask the right questions, Fersht said. “They should be worried.”

Even if the client company has no knowledge of outsourcer visa policies, it can be named in legal actions surrounding the case, like numerous Fortune 500 companies named in the Infosys civil case documents. “I don’t think any American organization wants their name attached to foreign employees on incorrect visas, in widely publicized court battles,” Fersht said.

To avoid this reputational harm Fersht says CIOs should push outsourcers to ensure that workers brought into the office are on the correct visa. “They’ve got every right to validate the immigration status of every employee sitting in their office.”

Schectman’s article refreshed the discussion of an issue I raised with Palmer’s attorney, Kenny Mendelsohn, in June of last year. In my post, “Do Infosys’ Clients Share Culpability in Alleged Visa Fraud?” I asked Mendelsohn about the prospects of legal action being taken against Infosys’ clients in the United States. His response:

My understanding of the law is that there is that possibility, although it would be up to the federal prosecutors to pursue something like that. There are some provisions in the law that say if you have people working for you, even through a contract, if they are here on improper visas or are illegal aliens, you can be held responsible for it. I think [the client companies] would have a lot of defenses, but then again, that would be for their lawyers and the State Department and Homeland Security [to address]. So there’s a possibility of a technical violation, but they’d have defenses to it, because they were all relying on Infosys to do the correct thing.

Mendelsohn also offered some advice for those companies to avoid being held liable:

If I was one of their clients, knowing what I know right now, the first thing I’d be doing is going through my facility, wherever the Infosys people are working, and demand to see their passports to determine what visa they’re here on. If I had someone working for me on a B1 visa, I would have him leave my facility immediately, and I’d be contacting Infosys to verify who was here on B1s, and who wasn’t. And then I’d take a closer look at the H1s, too, to see if they’re actually doing specialized work. The first thing I’d be doing is making my own determination of whether I had any people there illegally, because if you make the determination that they’re there, clearly you have the responsibility to not allow them to keep working for you.

So the fact that the Wall Street Journal is writing about all of this now is a welcome development, and an indication that Infosys will likely have to address the mainstream media with increasing frequency in the weeks ahead. Infosys spokeswoman Danielle D’Angelo provided this comment for Schectman’s article:

There is not and never has been a policy to use B1 visas to circumnavigate visa policies. We have never retaliated against any employee and any allegations that say otherwise are simply not accurate.

It’s up to the U.S. government authorities conducting the criminal investigation of Infosys to determine whether, by policy or not, Infosys used B1 visas to circumnavigate U.S. visa policies. And it will be up to a jury of Jay Palmer’s peers to decide on the truthfulness of the latter portion of D’Angelo’s statement.

Add Comment      Leave a comment on this blog post
Aug 15, 2012 8:58 AM rk rk  says:
I hope they are restored soon Reply

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