Bangalore: Infosys Ltd, India’s second biggest information technology (IT) firm, may have paid less than $100,000 to settle a visa fraud case with former US employee Satya Dev Tripuraneni, and managed to avoid litigation that could have posed a reputation risk, said officials and experts familiar with the settlement.
In a year when US lawmakers and firms are pushing to create more local jobs amid high unemployment, India’s software outsourcing firms may face more allegations that strengthen the case against foreign firms’ employment practices, immigration experts and officials said.
One of the persons who was involved in the early negotiations with Tripuraneni said the out-of-court settlement doesn’t mean the firm was guilty of wrongdoing, “but is a normal practice for firms seeking to avoid unwarranted scrutiny and reputation damage in the markets they operate”.
In December, Infosys said it reached an amicable settlement with Tripuraneni without any admission of liability. “This settlement enables us to avoid costs and distraction associated with protracted litigation,” the company said in a statement then.
An Infosys spokesperson said on Wednesday that the details of the agreement were confidential between the respective legal teams and the two parties.
When a firm settles out of court “without admitting liability”, it means payment was made by the company to avoid larger costs and distraction, said a US-based immigration lawyer tracking the case.
“The US is a highly litigious society. Defendants in civil lawsuits are usually wary about the time, cost, and bad publicity that come with lengthy litigation of cases,” said this lawyer, who didn’t want to be named. “So it is common practice to settle claims out of court, often involving payments. It will make perfect sense that a payment was made to avoid larger costs, distraction, and possible bad publicity for the company.”
Tripuraneni’s lawyer Steven G. Tidrick and his law firm didn’t respond to an email query sent on Tuesday.
“Allegations of fraud and victimization, whether proven or not, might show Indian outsourcing firms in poorer light,” said Morley J. Nair, a Philadelphia-based immigration lawyer. “Indian firms, as the largest users of the H-1B non-immigrant visa, seemed to have attracted a lot of attention in the US.”
Nair, however, added that such cases have nothing to do with the firms’ country of origin.
“Employers could get sued for alleged discriminations and violations, irrespective of the company’s size or origin,” Nair said. “Moreover, when issues such as high unemployment and financial downturn dominate the news, employment practices will be under greater scrutiny and anything that even remotely seem to be in violation of the rules will invite more attention than needed.”
Indian tech firms should expect more such allegations and prepare to deal with them going forward, experts said.
“I think this is a logical conclusion to draw about firms using similar business practices,” said Ron Hira, professor of public policy at the Rochester Institute of Technology in New York. “I think there are other issues such as how customers are reacting to the allegations. Will they change their relationships with providers that use mostly workers on visas? Will they perceive increased risks with these contracts?”
The Tripuraneni litigation was one of two visa-misuse cases filed against Infosys. While the other case was dismissed in August, the US Department of Homeland Security is currently investigating whether Infosys used short-term business visas to send engineers on long projects. Experts said the probe can help answer larger issues facing the US immigration system.
“None of the policy discussion has addressed how, and under what conditions, employers can move large numbers of temporary guest workers to the US. How many should be allowed? What kinds of criteria (skills, specialized knowledge) do they need to meet? Should there be a labour market test and what wages should they be paid?” said Hira.
Executives at other Indian tech firms said they have tightened internal procedures to comply with US immigration rules, but also complained of higher visa rejection rates ever since the Infosys cases became public.
“We are now dealing with rejection rates of over 50% in some cases, and much more of unwarranted scrutiny,” said a senior official at one of the top five Indian software exporters who manages visa applications for employees.
Experts such as Hira of Rochester Institute also blamed US policymakers for lack of clarity. “The current policy discussion about immigration conflates temporary guest workers with permanent immigration, creating confusion rather than clarity. This confusion is a direct result of the political strategy of the major American technology companies,” Hira said.