Court: District Court, N.D. California; September 18, 2015; Federal District Court
Plaintiffs Steven Heldt, Brian Buchanan, and Christopher Slaight initiated a putative class action against Tata Consultancy Services, Ltd. (TCS) alleging employment discrimination based on race and national origin under Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1866. The U.S. District Court, presided over by Judge Yvonne Gonzalez Rogers, considered TCS's motions to dismiss parts of the first amended complaint (FAC) and to strike certain allegations. The Court denied both motions but expressed concerns about ambiguities in the FAC, specifically regarding class definitions and conflicting terms. Consequently, the Court ordered the plaintiffs to submit an amended complaint, with TCS required to respond thereafter.
TCS, headquartered in Mumbai, India, employs about 14,000 individuals in the U.S. and provides IT consulting services. The plaintiffs allege a pattern of intentional discrimination favoring South Asian individuals, resulting in a workforce that is approximately 95% South Asian, contrasting sharply with the 1-2% representation in the general U.S. population.
Buchanan's claim details his employment at Southern California Edison (SCE) until February 2015, when he was terminated and replaced by TCS employees. Despite expressing interest in positions at TCS during a job fair, he received no follow-up, while TCS only hired five out of twenty-eight members from his team, three of whom were South Asian. Heldt was hired by TCS in June 2012 to manage an IT project for Kaiser Permanente.
TCS reassigned plaintiff Heldt from his original position to a less significant role as an IT Project Manager within a week, which he claims did not reflect his skills or experience. From October 2012, TCS did not assign him any client work, effectively placing him on the 'bench' multiple times while he continued to seek other positions within the company. Heldt contends that the roles he was assigned did not align with his qualifications and that he was often denied substantive work. TCS terminated him in March 2014, citing his time on the 'bench' and his refusal to relocate, claims Heldt disputes. He also alleges that TCS systematically favored employees of South Asian descent in employment decisions.
Similarly, plaintiff Slaight, hired as a software engineer in April 2012, claims he received no on-site training and lacked substantive work for six months before being benched in March 2013. He actively sought new placements until his termination in April 2013, alleging TCS discriminated against him and others not of South Asian descent.
The plaintiffs assert two causes of action: (1) disparate treatment under Title VII, specifically for Heldt and similarly situated individuals, and (2) disparate treatment under Section 1981 for Buchanan, Heldt, Slaight, and others. They allege TCS maintains a predominantly South Asian workforce through discriminatory practices such as favoring South Asian workers in the visa process, hiring, and employment decisions.
In response, TCS seeks to dismiss the claims under Rule 12(b)(6), arguing that its use of visa programs does not constitute discrimination under Title VII or Section 1981. TCS also argues for dismissal under Rule 12(b)(1), asserting lack of subject matter jurisdiction regarding claims of visa misuse due to plaintiffs' failure to exhaust administrative remedies, and contends that Heldt lacks standing for the failure-to-hire aspect of Count I.
TCS seeks to strike two categories of allegations in the First Amended Complaint (FAC) as irrelevant: (i) demographic comparisons between TCS employees and the U.S. population; and (ii) the timeframe for plaintiff Heldt's Title VII claim. The Court evaluates these motions and addresses the motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), which assesses the legal sufficiency of the claims. For dismissal, there must be either a lack of a legal theory or insufficient factual allegations. All factual claims must be accepted as true and construed favorably to the plaintiff.
TCS contends that the plaintiffs have failed to establish claims under Title VII and Section 1981, arguing that their claims regarding TCS’s recruitment of foreign workers via visa programs are inherently contradictory, as such programs require evidence that they do not displace American workers. TCS's assertion that its visa usage is non-discriminatory is deemed weak, and the Court finds that the FAC's allegations sufficiently inform TCS of the discrimination claims. TCS also argues that the attestations for H-1B visas prevent plaintiffs from demonstrating that they are similarly situated to the visa holders favored in hiring, which is necessary for a prima facie discrimination case. However, the Court indicates that the plaintiffs have made adequate allegations of discriminatory conduct to support their claims.
Plaintiffs assert that TCS's reliance on the McDonnell Douglas framework is misplaced, as they are not required to present comparator evidence to support their discrimination claims under Title VII or Section 1981. The Court concurs, referencing established Supreme Court and Ninth Circuit precedents which affirm that alternative evidence, such as gross statistical disparities or direct evidence of discrimination, can suffice to establish a prima facie case. Consequently, TCS's motion to dismiss the First Amended Complaint (FAC) under Rule 12(b)(6) is denied.
Regarding the motion to dismiss under Rule 12(b)(1), which addresses subject matter jurisdiction, TCS argues that the Court lacks jurisdiction over claims related to visa program misuse and that plaintiff Heldt lacks standing for failure to hire claims. The Court evaluates these arguments separately. TCS claims that plaintiffs must exhaust administrative remedies with the Departments of Justice and Labor before bringing misuse claims before the Court. However, plaintiffs counter that TCS has misinterpreted their allegations, clarifying that they do not claim misuse of the visa program.
Plaintiffs have denied that TCS misused the visa program, leading TCS to argue that the issue may be moot. However, TCS claims that the court lacks jurisdiction over the plaintiffs’ allegations regarding the visa program's misuse affecting their Title VII and Section 1981 claims, yet fails to provide legal authority to support this claim. The court recognizes that TCS only cited cases where jurisdiction was lacking due to allegations of visa misuse, such as in Biran (2002), which is not applicable here. Therefore, the motion to dismiss based on these jurisdictional grounds is denied.
Regarding plaintiff Heldt, TCS asserts he lacks standing to bring a failure to hire claim since he was hired by TCS. Nevertheless, Heldt is the sole named plaintiff for a Title VII claim and does have standing to assert claims for adverse employment actions, including termination. He has demonstrated injury in fact linked to TCS, fulfilling the requirements to maintain his discrimination claim under Title VII at this stage. TCS's argument conflates the standing necessary for Heldt to pursue his individual claim with his ability to represent a class of individuals not hired by TCS. The court emphasizes that once individual standing is established, the inquiry into class representation is separate. TCS's attempt to exclude Heldt as a class representative at this early stage is rejected, and the motion to dismiss on these grounds is denied.
For motions to strike, the court notes they are disfavored and should only be granted if the contested matter has no relevance to the litigation. The court must view pleadings in a light favorable to the pleading party. It can only strike portions of a complaint under specific circumstances, such as if they contain redundant, immaterial, impertinent, or scandalous content, as defined by Federal Rule of Civil Procedure 12(f). A matter is deemed immaterial if it does not pertain to the issues before the court.
Allegations deemed 'impertinent' are those that are not relevant to the case and inadmissible as evidence. A court must deny a motion to strike if there is any uncertainty about the relevance of the allegations. Courts often reject motions to strike unless the moving party demonstrates that the material in question will prejudice them, even if the allegations technically fall under categories outlined in Rule 12(f).
In this case, TCS's request to strike portions of the First Amended Complaint (FAC) related to statistical data and the class period for the Title VII claim was denied. TCS's arguments were characterized as substantive attacks on the plaintiffs’ allegations rather than appropriate for a motion to strike. TCS did not claim that the class period allegations were 'redundant, immaterial, impertinent, or scandalous,' which is necessary for a successful Rule 12(f) motion. Regarding the statistical data, TCS argued it was irrelevant; however, the court found it could be pertinent to illustrating the defendant’s practices. The court noted that the potential relevance of the data does not warrant striking it under Rule 12(f).
Ultimately, TCS’s motions to dismiss and to strike were denied. Plaintiffs were instructed to file an amended complaint by September 28, 2015, specifying the proposed class and subclasses, clarifying the basis for discrimination claims, and disavowing claims of visa program abuse. They were warned against conflating terms related to ethnicity, race, and national origin. TCS is required to respond to the amended complaint within fourteen days. The court's order terminates Docket Nos. 47 and 50.
