Major H-1B Employer Found to Discriminate against Non-Indians

A jury in California has found that the H-1B body shop Cognizant had a pattern and practice of discrimination against non-South Asian and non-Indian workers. This was a class action where the class consisted of roughly 2,000 American workers. The case now enters a second phase where the judge must determine if there was disparate impact on the plaintiffs.

Cognizant was formed as part of Dun & Bradstreet but was spun off into a separate corporation.

In the tech field, body shops don’t fix cars but rather supply workers, generally on a per hour basis, to other companies. The Immigration Act of 1990 created the H-1B visa which in turn created the H-1B body shop that specializes in supplying cheap, foreign labor. The Immigration Act of 1990 also spurred the creation of the offshoring model where a small number of workers are physically at the customer’s site who provide direct support for a much larger number of workers overseas.

The body shop makes its money by charging the customer more for a body than it pays the body. The customer has immediate access to bodies and is somewhat insulated from personnel issues regarding the body.

For example, when Disney replaced hundreds of Americans with H-1B workers, Cognizant was one of the companies that supplied the replacements. Disney could say it did not hire the H-1B workers and Cognizant could say that it did not fire the Americans who lost their jobs.

A body shop has to balance its stock of workers against its expected business. Customers expect to be able to receive a body immediately, but the body-shop wants to have as few bodies as possible not billable to customers.

The term “on the bench” developed among H-1B nonimmigrants employed by body shops who were not assigned to projects. It is a common, but unlawful, practice for employers to not pay H-1B workers who are on the bench, something not at issue here.

Cognizant has been one of the largest users of H-1B nonimmigrants. However, it has been increasing the size of its domestic workforce. Domestic workers also faced the prospect of being benched when not on a project. Cognizant would fire workers after being on the bench for five weeks.

The basic allegation was that when Cognizant had actual jobs available it would give preference to placing Indian/South Asian workers who were on the bench so that a disproportionate number of domestic workers would be fired after the five-week bench time.

There have been reports that Cognizant would appeal, but it does not appear that the case has reached a final, appealable judgment yet.

The case was brought under Title 8, Section 1981 of the Civil Rights Act of 1964.

The case is Cox v. Cognizant, 17-cv-06848, US District Court, Central District of California (Los Angeles).