Eighteen IT workers in California have filed a lawsuit against their former employer claiming they were replaced by H-1B workers from India and then laid off in violation of the state's anti-discrimination laws.
In the lawsuit, the 18 workers say that IT managers at Molina Healthcare Inc. increasingly catered to the Indian workers while leaving U.S. workers, mostly security analysts and programmers who earned at least $75,000 a year, feeling excluded prior getting laid off last year.
The lawsuit, filed in April in Los Angeles Superior Court against Molina, its CIO at the time, and Molina's outsourcer, Cognizant Technology Solutions, contends that over a period of several years the U.S. workers were marginalized as the IT department became dominated by Indian nationals.
The laid off IT workers used anecdotes to make part of their case.
For instance, the workers describe an IT department that took to celebrating Indian holidays, while Indian managers "actively discouraged U.S. workers from celebrating U.S. holidays and traditions, such as Christmas, the Fourth of July and Thanksgiving, by assigning mandatory work that, in order to be timely completely, required work during holidays traditionally celebrated in America."
The lawsuit says that non-Indian workers were kept from participating in critical decision making processes "for the purpose of putting them at a disadvantage to the employees of Indian descent."
It also charges that the IT management team only hired and promoted Indian nationals
Some meetings that had long been conducted in English, would "on many occasions" be conducted in "the native language of Indian employees," the lawsuit contends.
The lawsuit makes a number of charges, including discrimination based on national origin.
"The IT department was known as little India," said James Otto, an attorney for the 18 former Molina IT employees. The 18 workers were among 40 that were laid off in January, 2010. The 18 workers that filed suit claim the layoffs were made to make room for H-1B workers.
"They just wanted to fire the Americans, and that's what happened. It wasn't a downsizing, it wasn't an outsourcing, it was bringing in foreigners onto American soil to replace American workers. That [was] the scheme and it's going on around the country," said Otto.
Molina officials, in a written response to a Computerworld query, said the action is "nothing more than a shakedown lawsuit brought by a plaintiff's attorney who -- when the company refused his ridiculous financial demands -- filed a legal action grounded in falsehoods and malicious gossip."
Otto said he never made any demands and he had initially sought mediation.
Molina, in its statement, also said that "we will win in court because specific allegations in the lawsuit have been examined and found false. The fact that the general allegations also provide no basis for legal claims confirms that this plaintiffs' attorney included them solely for media attention."
Molina said it is an American company "employing more than 4,200 Americans," and that "less than 50 of our employees are H1B visa holders and they were hired only in cases when it was necessary to cast a wider net for particular skills."
The lawsuit says that on Jan. 14, 2010, one day after the U.S. Department of Labor approved Cognizant's application for 40 H-1B workers, Molina fired 40 programmers, security analysts and managers.
Molina, in response, said that particular Cognizant filing "had nothing to whatsoever to do with Molina and not a single person was hired at Molina based on that application."
Cognizant is named in the lawsuit, in part, for not trying to find qualified U.S. workers for the positions.
It also claims that the wages for the H-1B employees were approximately 50% less than that paid to their American counterparts.
In a written response to a query about the lawsuit, Cognizant said it "takes legal and regulatory compliance very seriously. It is Cognizant's view that this lawsuit is without merit, and we will vigorously contest it and pursue all legal remedies that may be available to us."
"The healthcare industry is one of the largest industry segments that Cognizant serves," said Cognizant. "Our expertise enables our clients to be more competitive in the marketplace, thereby enhancing their ability to provide affordable, quality healthcare to consumers."
Otto said allegations in the lawsuit are backed by direct testimony. He noted that Molina's former manager of budget and regulatory reports and audits testified that IT department expenses increased beyond its budget after the layoffs.
The lawsuit also alleges that in 2007 and 2008 "Molina learned of numerous material violations of HIPAA (Health Insurance Portability and Accountability Act) but did not take any action with respect these violations."
When Molina's IT department runs a test on new software projects, the IT employees are required to mask the data embedded in the software to protect privacy, according to the lawsuit. The suit alleges that that Molina's H-1B employees would send patient names, Social Security numbers, addresses, birth dates and full medical files to employees in India.
The lawsuit also alleges that on Jan. 12, 2010, Molina IT employees spoke with their manager about discrimination and HIPPA issues. Two days later, according to the lawsut, the employees who complained were included in a broad layoff action.
Molina, in response, said that this claim is false, and that it "rigorously protects patient privacy and fully complies with all federal and state laws" including HIPPA.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is firstname.lastname@example.org.