Two employees of Indian outsourcer Tata Consultancy Services (TCS) have won class action status for a lawsuit alleging that the company made deductions from their wages in breach of their contract while they were working in the US. A judge in the US District Court for the Northern District of California granted their suit class action status yesterday.
Top Indian outsourcers send a large number of employees recruited in India to work on client projects in the US, leading potentially to allegations of misuse of visas and exploitation of workers.
In this case, the two former employees, who were not US citizens, alleged in a complaint against TCS and parent company Tata Sons, that the employer uniformly breached the standard employment contract for its employees by forcing all employees who were not US citizens to sign over their federal and state tax refunds to Tata, and by deducting their Indian salary from their compensation, according to a statement from Lieff Cabraser Heimann & Bernstein, the employees' counsel.
Tata is also said to have deprived its employees in California of earned wages and accurate wage statements in violation of the California Labor Code.
Judge Claudia Wilken of the US District Court for the Northern District of California certified a national class that may prosecute the plaintiffs' breach of contract claims. The class has been defined as "all non-U.S. citizens who were employed by Tata in the US at any time from February 14, 2002, through June 30, 2005, and who were deputed to the US after January 1, 2002."
The judge also certified a similar class for Tata employees in California during the period, allowing them to prosecute some of the plaintiffs' claims.
A nationwide class action lawsuit was filed in February 2006 by Lieff Cabraser Heimann & Bernstein, but Tata filed for the dismissal of the case on the ground that it had to be arbitrated in India.
TCS said today that it had received the order of the court, but added that it is only on one procedural matter and does not address the merits of the case. TCS said it continued to believe that the court would find the plaintiffs' claims without merit.