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Rediff.com  » Business » US court allows lawsuit to proceed against TCS

US court allows lawsuit to proceed against TCS

April 04, 2012 01:28 IST

The US district court of Northern California on Monday allowed two former employees of I-T giant Tata Consultancy Services Ltd to proceed with a class action lawsuit against their former company over wage dispute and breach of contract.

The case that started with two plaintiffs will now cover 13,000 TCS employees, who worked between 2002-2005 in the United States.

"This is a big case. It's going to be an exciting case," Steven M Tindall, Rukin Hyland Doria & Tindall LLP, and plaintiffs' attorney, told Rediff.com

Tindall said, "It's an important case because of the companies, coming from outside are not aware of the bylaws in the US. Even though these employees are from India, US laws govern them once they start working here. So we want to make sure that this law gets enforced." 

"We have received the order of the US district court. This is an order only on one procedural matter and does not address the merits of this case. TCS continues to believe that when this matter concludes, the court will find that the plaintiff's claims are without any merit," the US media cell of TCS said, when contacted by Rediff.com.

The case was filed six years ago by Gopi Vedachalam and Kangana Beri on behalf of themselves and all others employees in similar situation. The plaintiff alleged that their company breached contract and each of these people signed an employee agreement with TATA.

"We allege that in the suit that TATA violated that contract by requiring them to pay their tax refund check, back to the company.

In the nationwide claim, the company broke the federal law," said Tindall.

Also these employees were supposed to get both Indian salary as well as US salary, which did not happen. "We have alleged that they deducted Indian salary from the US salary," said Tindall.

"Yes, they have a written agreement," noted Tindall. "However, the TCS after July 2005 has stopped this practice," he added.

Talking on the achievement that came after six long years, Tindall said, "It is a big milestone in the case because till now it wasn't sure that these two people would represent the 13,000." He added, "It's a global news, as it's a global company. But all the events that we are talking about happened in the US." 

The lawsuit has another part to it that covers the California state law. Out of 13,000 the case also deals with the 6,000 employees who worked in the state of California during 2002-2005.

"We have California group, in that breach of contract," said Tindall. Though it is a similar claim, but California statute says employers cannot recoup money from their employees.

According to the court report, plaintiffs alleged various California wage and hour violations in this diversity-based class action, along with collateral claims. 

The lawsuit names Tata America International Corporation, Tata Consultancy Services Ltd and Tata Sons Ltd as defendants in this action.

TCS is an information technology-outsourcing and consulting company headquartered in India and Tata Sons Ltd is the parent company.  Tata America International Corporation is a United States subsidiary of TCS. 

Gopi Vedachalam is one of two plaintiffs in the suit. Vedachalam, an Indian native worked as a project manager in the United States since April 2000 under an L-1 visa. The L-1 visa allows multinational companies to transfer foreign employees to work for parent, subsidiary, affiliate or branch offices in the United States. From 2000 to 2003, Vedachalam worked in California at various locations. 

Vedachalam's complaint alleges his agreement salary was $74,000 per year during his deputation in the US, but that he did not receive this amount of salary in 2004 or 2005. In addition, Vedachalam alleges that defendants forced him to endorse his tax refund check over to TCS by stamping the back of the check to the Tata Consultancy Services. 

He further alleges that defendants retained state and local tax refunds intended for him totaling nearly $25,000. 

In six of the nine claims alleged in the complaint, Vedachalam has alleged defendant on breach of contract for failing to pay the salary promised in the Deputation Terms Agreement; conversion of tax refunds; unjust enrichment through retaining tax refunds; violation of California Labour Code (which provides that it "shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid"); violation of California Labour Code (which requires that the employer provide accurate statements showing gross wages and deductions); and "false, unfair, fraudulent and deceptive business practice within the meaning of (California) Business and Professions law.

Tindall said he has been receiving phone calls from various Indian employees in US, alleging similar situation.

On how challenging is the case, Tindall said, "They (TCS) are well funded and have hired very good lawyer, but we are happy with what we are doing."

Ritu Jha