Ruling in Favor of Infosys in Whistleblower Retaliation Case Shifts Focus to Criminal Investigation

Don Tennant

Infosys employee and whistleblower Jay Palmer’s retaliation lawsuit against Infosys came to an end on Monday, as the federal judge hearing the case ruled in favor of Infosys’ motion for a summary judgment, finding that Palmer does not have an actionable case against Infosys under Alabama state law. But the celebration at Infosys may well be short-lived.


Before I get into what lies ahead for Infosys, let me address the Opinion that was filed by U.S. District Court Judge Myron H. Thompson on Monday. I have never spoken with Judge Thompson, and I don’t pretend to be able to read his mind. But it’s not difficult to deduce from the way he wrote his Opinion that he wasn’t happy about being compelled to rule in favor of Infosys, and about having his hands tied by Alabama state employment law. The Opinion was laced with such caveats as, “rightly or wrongly,” “like it or not,” and “this court cannot rewrite state law.”


Here’s an excerpt from Judge Thompson’s Opinion:

Because Palmer’s claims arise out of his employment, it is important to keep in mind that Alabama is an ‘at-will’ employment state. The Alabama Supreme Court has explained that: “The bedrock principle of Alabama employment law is that, in the absence of a contract providing otherwise, employment in this state is at-will, terminable at the will of either party. Under this doctrine, an employee may be discharged for any reason, good or bad, or even for no reason at all.” … And an extension of this principle and logic would be that, 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 Alabama Supreme Court has, rightly or wrongly, jealously guarded this at-will status … It is against this backdrop of Alabama law, like it or not, that the court considers Palmer’s claims arising out of his employment.


So under Alabama state employment law, rightly or wrongly, like it or not, an employee can be adversely treated for any reason, or for no reason at all. And there’s nothing Judge Thompson could do about that, as he pointed out in his Opinion:

Without question, the alleged electronic and telephonic threats [against Palmer] are deeply troubling. Indeed, an argument could be made that such threats against whistleblowers, in particular, should be illegal. 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. Therefore, for the reasons given throughout this opinion, this court must conclude that, under current Alabama law, Palmer has no right to recover from Infosys.

I spoke with Palmer’s attorney, Kenny Mendelsohn, on Monday night. Here’s what he had to say about Judge Thompson’s ruling:


It’s disappointing, but we certainly respect, and even understand, Judge Thompson’s Opinion. Despite the ruling, there was a lot in the Opinion that was comforting to me. He said the things Jay went through were troubling and worrisome, and that there’s a strong argument that stuff like this that happens to whistleblowers should be illegal. But he’s bound by Alabama law, and he can’t rewrite the law. And under the law, he had to find that this doesn’t amount to the tort of outrage.


From my point of view, I’m proud of Jay for standing up to them, because it was this lawsuit that has spurred so much interest, and helped with the criminal investigation of Infosys, and brought all this to light. And as Judge Thompson said, he can’t rewrite the law. But I hope some people will take a look at this and realize we need to do more for the Jay Palmers of the world.


Infosys did not respond to my request for a comment. But according to other media outlets, the company released this statement on Monday:


Today's decision confirms what we have been saying from the beginning: Mr. Palmer's claims of retaliation were completely unfounded. This is a company built on core values that include leadership by example, integrity and transparency. Those values always have and will continue to shape the way we do business with our clients and, without exception, the way we treat our people. We are pleased to consider this matter officially closed.


Well, not so fast. It all depends on how you define “this matter.” If it’s the relatively innocuous matter of Palmer’s retaliation and harassment claim, yeah, it’s over. But if we’re talking about the alleged visa and tax fraud that Palmer blew the whistle on, unfortunately for Infosys, it’s officially wide open. Mendelsohn put it this way:


When I first got involved, it was a whistleblower case that needed to be reported to the federal government. But I can tell you, this thing is a lot bigger than just this case, or just this decision today by Judge Thompson. While it is disappointing, and it is somewhat of a setback, the overall matter with Infosys and their conduct is far from over.


Jay is still a material witness in an ongoing criminal investigation, and an administrative investigation, by various federal government agencies. As this case developed, it became clear that this matter was far bigger than just Jay Palmer or Kenny Mendelsohn. There is still a lot more that will be done involving the Infosys matter, and while this is a setback, this is not, by any means, over. There’s a lot more going on involving Infosys, but I’m not allowed at this time to make any other comments.


I don’t know what it is that Mendelsohn can’t talk about. What I do know is that Judge Thompson’s ruling on Palmer’s retaliation lawsuit has absolutely no bearing on the criminal investigation of Infosys that’s being led by the Department of State, the Department of Homeland Security and the Department of Justice. As I’ve been reporting for well over a year, it’s the criminal proceedings involving alleged violations of U.S. immigration and tax laws, not Palmer’s civil case about alleged harassment and retaliation against one individual, that really matter.

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