Judge Denies Infosys� Arbitration Motion in Palmer�s Visa Fraud Case

Don Tennant

In a key ruling in favor of Infosys employee and whistleblower Jay Palmer, a federal judge has denied Infosys' motion to compel arbitration in Palmer�s visa and tax fraud lawsuit against the company. That means Infosys� hopes to have the case heard behind closed doors have been dashed.

Palmer�s attorney, Kenny Mendelsohn, informed me last night that U.S. District Court Judge Myron H. Thompson yesterday denied the motion, which Infosys filed in March (see my post, ). Infosys had argued that Palmer had signed an agreement under which any disputes between him and the company would be settled by arbitration. In my April post, I noted that Infosys was going to have a tough time getting Judge Thompson to buy that argument. Here�s an excerpt from that post:

In his objection to the arbitration motion filed to Federal District Court Judge Myron Thompson on [April 12], Kenny Mendelsohn, the attorney representing Palmer in the case, brought some information to light that Infosys no doubt would have preferred be kept under wraps. It turns out that Infosys� arbitration argument has already been stricken down by a judge in a previous case of an Infosys employee filing a lawsuit against the company.

That was the case brought last summer by Promila Awasthi, a U.S. citizen of Indian descent who worked for Infosys in California. � Infosys filed a motion to compel arbitration in that case, arguing that as a condition of employment, Awasthi had signed an arbitration agreement in which she acknowledged that any claims or disputes against Infosys �shall be subject to binding arbitration.� Unfortunately for Infosys, court documents show that the Superior Court of Alameda County, Calif., denied the motion, finding that the �arbitration agreement is not enforceable as it is unconscionable.� That�s a legal term that simply means �unfair� or �one-sided.�

Equally unfortunate for Infosys, that�s the very same arbitration agreement that Palmer was compelled to sign in 2008 as an eleventh-hour addendum to his employment negotiations and processing, and on which Infosys is basing its arbitration argument in his case.

Indeed, Judge Thompson denied Infosys� motion for the same reason. Here�s an excerpt of his finding yesterday:

Because the parties did not �clearly and unmistakably� agree to arbitration arbitrability, this court must decide Palmer�s unconscionability challenge.� Under California law, �[u]nconscionability analysis begins with an inquiry into whether the contract is one of adhesion.� � A contract of adhesion is another term for a �standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it. � Here it is clear that the arbitration agreement is a contract of adhesion. The arbitration provisions, included within a larger employment contract, are boilerplate and drafted by the party with superior bargaining power, the employer. Similarly, the contract is procedurally unconscionable. The employment agreement begins: �As a condition of my employment with Infosys...I agree to the following.� � Indeed, �few employees are in a position to refuse a job because of an arbitration requirement.� ... This type of ��oppression� ... due to unequal bargaining power� suffices for a finding of procedural unconscionability.�

It�s a major blow for Infosys, and a huge victory for Palmer. More importantly, it�s a victory for the cause of justice. Now Infosys is forced to try to get Palmer to settle the case, or to have all of its dirty laundry aired in open court.



Add Comment      Leave a comment on this blog post
Nov 10, 2011 1:04 AM R. Lawson R. Lawson  says:

"That means Infosys� hopes to have the case heard behind closed doors have been dashed."

This is bad news for Infosys, and all the other body-shops that misapply the law. 

Chamat, to say that Infosys wanted arbitration for a quick resolution alone is silly-talk.  Of course they don't want their dirty laundry aired publicly and on the record. 

If this goes all the way without settlement, the details of this case will reveal CORPORATE POLICY to ignore our immigration laws.  And I am so looking forward to rehashing the definition of "corporate policy" because the first time around was so much fun.  (not)

Corporations routinely require employees to sign arbitration agreements, and most people don't realize that they really aren't enforceable.  Nor are most non-compete agreements - many of which bar you from gainful employment in your profession.

�As a condition of my employment with Infosys...I agree to the following.� � Indeed, �few employees are in a position to refuse a job because of an arbitration requirement.� ... This type of ��oppression� ... due to unequal bargaining power� suffices for a finding of procedural unconscionability.�

Oppression indeed.  Most people don't know their rights and allow themselves to be bullied.  Sign the stupid agreement, and ignore it because it isn't enforceable.  Corporations won't sue you because you can counter-sue, and they have much more to lose.

Reply
Nov 10, 2011 1:22 AM George Alexander George Alexander  says:

Anyone have any ideas on what could be the consequences for infosys if they are found guilty?

Reply
Nov 10, 2011 1:43 AM Amit Arora Amit Arora  says: in response to George Alexander

I am guessing there will be revoked from filing H1b for 3 years and 3 B US$ fine.

Reply
Nov 10, 2011 1:49 AM hoapres hoapres  says: in response to Amit Arora

Nothing is likely to change.  This might get some news for a day or two and then the whole thing goes away.

Reply
Nov 10, 2011 11:51 AM Chamat Chamat  says:

"That means Infosys� hopes to have the case heard behind closed doors have been dashed."

I dont feel there is anything to do with closed doors as mentioned by Tennant. Companies usually prefer arbitration just to save time and nothing more than that.

Moreover this news was all over the place yesterday night itself

Reply
Nov 10, 2011 12:09 PM George Alexander George Alexander  says:

This is good news... hopefully this won't drag on for years.

>>The employment agreement begins: �As a condition of my employment with Infosys...I agree to the following.� � Indeed, �few employees are in a position to refuse a job because of an arbitration requirement.� ... This type of ��oppression� ... due to unequal bargaining power� suffices for a finding of procedural unconscionability.�<<

Companies like Infosys think that if they push people to sign documents, they can get away with illegal stuff. I hope this country continues to be a nation of laws.

Reply
Nov 11, 2011 1:07 AM Singh Singh  says:

I am so happy to hear this news. Chop-shops like Infosys, Wipro, TCS, etc. must be watched closely in future. They not only break US immigration laws but also steal a heck lot of American jobs. Good job Palmer!

Reply
Nov 11, 2011 12:46 PM Wakjob Wakjob  says:

What this really means is the feds plan to pursue a criminal case. Skirting the law is one thing, but outright fraud is a serious criminal offense. My bet is we're going to see this end up like the Galleon case with lots of Indian fraudsters inside InfoSys being led away in handcuff and put in the slammer for a long time. This has been a dream of mine for 13 years and we're finally seeing it happen. If the feds have any brains, they will start wiretapping all the other Indian bodyshops out there big and small. I can only imagine the extent of the fraud they would find - has to be in the 100,000s of persons.

Reply
Nov 26, 2011 9:52 AM Ex-Infy Ex-Infy  says:

Can someone educate me on whatis the next course of action?

If Infy has avoided tax, it's a crime against US govt.  So this is a case of Infy vs US govt incl people of USA and not against jay Palmer.

People of USA should come out in support of jay by paying his attorney bills.

Reply

Post a comment

 

 

 

 


(Maximum characters: 1200). You have 1200 characters left.

 

null
null

 

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.