With Options Limited, Infosys Tries Dismissal Tack in Palmer Case

Don Tennant

In what appears to be a desperate attempt to avoid having to release damning information as federal authorities close in with their criminal investigation, Infosys on Monday filed a motion to dismiss five of the six counts in the civil lawsuit filed by Infosys employee and whistleblower Jay Palmer.

 

In its motion, filed in the U.S. District Court for the Middle District of Alabama, where a trial date in the case has been set for August, Infosys is claiming that the five counts should be dismissed "because they fail to state a claim upon which relief may be granted," meaning Infosys is trying to deny their validity. Infosys did not seek dismissal of the first count, which alleges breach of contract in the form of failure to pay Palmer's bonuses and expenses. The five counts that Infosys is trying to have dismissed are:

 

  • Intentional Infliction of Emotional Distress. Infosys' conduct subjected Palmer to harassment, retaliation, discrimination, loss of income and benefits, and otherwise put him in a hostile work environment in which Palmer was forced to endure racial taunts or slurs.
  • Hiring, Training, Monitoring and/or Supervising Whistleblower Team. Infosys negligently, wantonly and/or intentionally hired, trained, monitored and/or supervised its Whistleblower Team, and the Whistleblower Team failed and refused to follow the Whistleblower policy.
  • Hiring, Training, Monitoring and/or Supervising HR Employees. Infosys negligently, wantonly and/or intentionally hired, trained, monitored and/or supervised its Human Resources Department, which failed and refused to protect Palmer from threats, intimidations and harassments; to protect Palmer from repeatedly threatening situations; to prevent retaliation with regard to bonuses and payouts; to intervene after Palmer informed Infosys that he was being subjected to threats, intimidations and harassments, conduct that was causing emotional stress to Palmer; and to follow company policies with regard to Whistleblower protections.
  • Negligent, Wanton and/or Intentional Misconduct. Infosys knew that Palmer was subjected to discrimination, retaliation and harassment as a result of notifying Infosys of criminal violations by the company, and it negligently, wantonly and/or intentionally breached its duty to Palmer by allowing and condoning the discrimination, retaliation and harassment.
  • Legal Misrepresentation/Fraud. Infosys represented to Palmer that he should report criminal and other improper activity, and that if he did so he would be protected from discrimination, retaliation and harassment. Those representations were false, and Infosys knew they were false. Palmer repeatedly requested that Infosys protect him and remove him from the hostile work environment, but Infosys refused to do so.

 

I spoke on Tuesday with Kenny Mendelsohn, Palmer's attorney, who said he was unsurprised by Infosys' dismissal tactic:

It's not that big of a deal, because it's not that unusual. I don't think it has any merit to it, but it certainly didn't surprise me. Based on the way Infosys has been handling this matter for over a year now, it doesn't surprise me that they're going to try to do everything they can to keep the information from getting out in the public. They're going to make us fight every step of the way, but we're prepared to fight them, and I'm going to fight them on this motion.

What Mendelsohn did find surprising is the timing. Because Infosys had failed to respond to questions and to provide documents requested by Mendelsohn as part of the discovery process, Mendelsohn earlier on Monday had filed a motion to compel Infosys to respond to his questions, and a motion to compel Infosys to provide the documents. Those motions were denied the same day by a magistrate judge who ruled that the parties needed to try to resolve any discovery disputes in a good-faith conference before seeking court intervention, and that such a conference had to take place within 20 days. This is what Mendelsohn said about the timing of Infosys' motion to dismiss:

I would have thought that if they were really serious about it, they would have done it right after [U.S. District Court] Judge [Myron] Thompson ruled [in November] on the arbitration issue [when Thompson denied Infosys' motion to compel arbitration]. It's kind of strange that they're doing it at the same time as they're fighting producing documents and answering my questions. The motion came the same day the judge ordered them to have a conference with me about the discovery. I just think all of this is unusual timing, but they certainly have a right to do it, and I certainly have a right to respond to it, which I will.

Mendelsohn will get that chance soon. On Tuesday, Judge Thompson gave Mendelsohn a deadline of Feb. 3 to file a brief in response to Infosys' motion to dismiss, and he gave Infosys a deadline of Feb. 10 to reply to that brief, all without oral arguments. That has complicated things, because the motion to dismiss won't be settled within the time frame that the magistrate gave the parties to have a conference to try to resolve their discovery dispute. There's no way to resolve that dispute while Infosys is still seeking dismissal of the counts around which the discovery process revolves, so it appears the court will need to make some adjustment to the timing of these next steps.

 


In any case, the real thrust of what's going on is that Infosys is doing everything in its power to stall Palmer's case until the outcome of the federal government's criminal investigation of Infosys' alleged visa and tax fraud (which, you'll recall, was triggered by Palmer's case) is reached. The last thing the company wants to do is to provide answers and produce documents that cause its fraudulent activity to be seen as even more egregious in the eyes of the feds.

 

If it wasn't for Infosys' arrogance and its blatant disrespect for the U.S. justice system, I might find myself feeling a little sorry for the company. With the feds breathing down its neck, Infosys is in a horrible jam, and it has absolutely no idea how to get out of it. The outlook for the company is potentially catastrophic, and you can be assured that Infosys knows it. All it can do at this point is try to stave off Palmer's case while it scrambles to figure out what to do about its criminal investigation nightmare.

 

The real shame is that it all could have so easily been avoided. The wrongdoing could have been quietly, painlessly resolved, if only Infosys had had the courage and decency to do the right thing when one of its star employees brought those visa and tax fraud problems to its attention. May that lesson be one that's taken to heart by other companies when the whistle inevitably blows.



Add Comment      Leave a comment on this blog post
Jan 25, 2012 1:02 AM Mark Mark  says:

Thanks again Don for the updates on a very important topic.

Reply
Jan 25, 2012 3:57 AM IAmNumber813 IAmNumber813  says:

"In any case, the real thrust of what's going on is that Infosys is doing everything in its power to stall Palmer's case until the outcome of the federal government's criminal investigation of Infosys' alleged visa and tax fraud (which, you'll recall, was triggered by Palmer's case) is reached."

I'd like to suggest another possibility that relates to the real motive: money.

The feds are under no time pressures or cost constraints to complete their criminal investigations of Infosys. I believe Infosys is taking this action to try to reduce the settlement value of the case (by reducing its liabilities).

Infosys' management see the motion as a plus because they think it will put psychological pressure on Palmer. Infosys' lawyers see the motion as a plus because they can continue billing Infosys high hourly rates for their partners and associates.

Infosys had a good window to settle this case during the Christmas/New Year holidays when there would have been less media attention. However, Infosys must now be approaching the point where their legal fees and costs will exceed the settlement cost for the case. It may be time for Infosys to seek advice from another law firm.

Also, Infosys' lawyers may be subject to sanctions for allowing key witnesses to leave the country and not informing the court.

"Infosys Sends Key HR Staff Back to India, Avoids Depositions"

http://www.itbusinessedge.com/cm/blogs/tennant/infosys-sends-key-hr-staff-back-to-india-avoids-depositions/?cs=49373

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