Tata Consultancy Services

Vedachalam v. Tata Consultancy Services, Ltd. Employee Lawsuit

Unjust Enrichment Lawsuit Filed Against Tata

On February 14, 2006, a former employee of Tata Consultancy Services, who was sent from India to the United States to work in information technology jobs and represented by Lieff Cabraser, filed a nationwide class action lawsuit against Tata. The suit charges that Tata unjustly enriched itself by requiring all of its non-U.S.-citizen employees to endorse and sign over their federal and state tax refund checks to Tata and by taking unauthorized deductions from employee's paychecks.

Employee Allegations Against Tata

The complaint alleges that Tata has required its non-U.S.-citizen employees to sign power of attorney agreements delegating an outside agency to calculate and submit each employee’s tax return to state and federal authorities. Tata then required its non-U.S.-citizen employees who received tax refunds from state and federal tax authorities to endorse the tax refund checks and demanded that they send those checks back to Tata.

Among other violations of California and federal law, the complaint charges that Tata’s conduct violates California Labor Code Section 221, which provides that it is unlawful "for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee."

The complaint also alleges that Tata did not pay its non-U.S.-citizens employees the amount promised to those employees before they came to the United States. In standard employment contracts, Tata promised to pay its employees a gross U.S. salary and a separate Indian salary. Tata's unauthorized deductions from its employees' wages prevented Tata's employees from receiving both their promised U.S. salary and Indian salary.

Court Grants Class Action Status

On April 2, 2012, the U.S. District Court Judge Claudia Wilken found the plaintiffs satisfied the legal requirements for a class action and certified two classes, consisting of over 13,000 people:

• National class, defined as "all non-U.S. citizens who were employed by Tata in the United States at any time from February 14, 2002 through June 30, 2005 and who were deputed to the United States after January 1, 2002."
• California class, defined as "all non-U.S. citizens who were employed by Tata in California at any time from February 14, 2002 through June 30, 2005 and who were deputed to California after January 1, 2002."

On June 16, 2012, the Ninth Circuit Court of Appeals rejected Tata's request to appeal Judge Wilken's class certification order.

2013 Update

On February 21, 2013, plaintiffs' counsel moved for preliminary approval of a $29.75 million settlement with Defendants. On April 5, 2013, U.S. District Court Chief Judge Claudia Wilken of the Northern District of California granted preliminary approval to the settlement. You can view a copy of the preliminary approval order here, and a joint press release issued by the parties at preliminary approval.

Contact Lieff Cabraser

Current and former Tata employees who wish to learn more about the lawsuit may contact a Lieff Cabraser attorney. All information will be kept confidential as provided under the law.

Lieff Cabraser is also investigating other Indian and American companies that may have also breached employment agreements and violated state labor laws for Indian employees sent or transferred to the U.S. Learn more about this investigation by clicking here.

Litigation History

In June 2006 and April 2007, Tata America International Corporation and its parent corporations Tata Consultancy Services, Ltd., and Tata Sons, Ltd. (collectively referred to as "Tata"), filed a motion to dismiss the case, arguing that the case should be arbitrated in India rather than the United States. Lieff Cabraser opposed the motion. In November 2006 and June 2007, the Court heard oral argument on the motions and took them under submission.

On March 13, 2007 and February 14, 2008, the U.S. District Court denied Tata's motion to compel arbitration in India and dismiss the nationwide class action lawsuit in United States court. The Court held that the documents purportedly requiring arbitration in India applied one set of rules to plaintiffs and another set to Tata, negating any mutual agreement to arbitrate legal disputes.

Tata appealed. On July 30, 2009, the Ninth Circuit Court of Appeals denied the motion of Tata to compel arbitration in India and dismiss the nationwide class action lawsuit filed in U.S. District Court in San Francisco. Read a copy of the appellate decision.

"The Court's orders ensures that [the plaintiffs] will have their day in court in the United States before a neutral judge, not in India in front of a private arbitrator of Tata's choosing," explained Kelly M. Dermody of Lieff Cabraser, co-class counsel for the plaintiffs. "[The plaintiffs] and the thousands of workers they seek to represent are an important step closer to obtaining justice."

In November 2009, Tata filed a motion to dismiss most of Plaintiffs' claims, arguing that the heart of Plaintiffs' case lacked legal merit. On February 4, 2010, the U.S. District Court heard oral argument on the motion and decided not to dismiss this lawsuit. All of Plaintiffs' substantive legal claims for breach of contract and violations of California wage laws will go forward. Read a copy of the order. 

In January 2011, Plaintiffs asked the Court to compel Tata to produce certain documents that Tata had refused to produce. The Court granted Plaintiffs' motion and Tata now has to produce the documents. Read a copy of the Order here.

Tata filed a motion for summary judgment on many of Plaintiffs' claims, arguing again that Plaintiffs' case lacked legal merit.

On July 13, 2011, the Court granted in part and denied in part Tata's motion. Importantly, the Court allowed Plaintiffs' legal claims for breach of contract and certain violations of California wage laws to go forward. Read a copy of the Order here.