In Depth Tata Consultancy Services, TCS to pay $30 Million Rs.158 Crore to settle suit filed by Gopi Vedachalam and Kangana Beri

In Depth  Tata Consultancy Services, TCS to pay $30 Million Rs.158 Crore to settle suit filed by Gopi Vedachalam and Kangana Beri

Tata Consultancy Services (TCS) has agreed to pay $29.8 million (Rs 161 crore) to settle a suit filed by two of its former employees.

The suit was filed by Gopi Vedachalam and Kangana Beri

The suit, related to unpaid wages, was filed by Gopi Vedachalam and Kangana Beri, TCS employees sent to work on projects in the US

Case name - Vedachalam v. Tata America International Corp., 06-cv-00963, U.S. District Court, Northern District of California (Oakland).

Judge - Judge Claudia Wilken, presiding

Plaintiff -

1 - Gopi Vedachalam

2 - Kangana Beri

Defendants –

1-    Tata America International Corporation

2-Tata Consultancy Services, Ltd

3-Tata Sons, Ltd

Case Details –

From 2000 to 2003, plaintiff Gopi Vedachalam worked in Hayward, California, as a Tata project manager assigned to Target. Since 2003, he has worked as a Tata project manager for 21st Century Insurance in Woodland Hills, California.

Class counsel announced that District Court Judge Vaughn Walker denied the motion of Tata America International Corporation and its parent corporations Tata Consultancy Services, Ltd., and Tata Sons, Ltd. (collectively referred to as "Tata") to compel arbitration in India and dismiss the nationwide class action lawsuit in United States court.

The complaint, brought in Federal court in San Francisco by Gopi Vedachalam, an employee of Tata America International Corporation, alleges 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.

The U.S. District Court in the Northern District of California granted a motion for two non-U.S. workers to continue a class-action lawsuit against their India-based information technology provider, Tata Consultancy Services, Ltd., and its parent firm, Tata Sons, Ltd.

"Judge Walker upheld the principle that before a company can force an employee working in the United States to give up the right to have his or her claims heard in a United States court, it must show that both the company and the employee clearly and mutually agreed that these claims would be heard elsewhere," stated Steven M. Tindall of Rukin Hyland Doria & Tindall, co-class counsel for plaintiffs.

 "The Court found that the documents purportedly requiring arbitration in India applied one set of rules to Mr. Vedachalam and another set to Tata, negating any mutual agreement to arbitrate legal disputes."

Defendants in this tried that case be solved in India before a private arbitrator.

But Because Of US, law judge allowed the plaintiff to go ahead with the suit.

The complaint alleges further that, at least until July 2005, Tata 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 send them back to Tata.

Under California Labor Code Section 221, 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 charges that Tata's conduct violates this Code section as well as the common law forbidding unjust enrichment and conversion.

The Court certified two classes:
one consisting of all non-U.S. citizens who were employed by Tata in the U.S. any time from Feb. 14, 2002, through June 30, 2005, and who were sent to the U.S. after Jan. 1, 2002;

And a California class asserting California Labor Code violations, consisting of all non-U.S. citizens who were employed by Tata in California at any time from Feb. 14, 2002, through June 30, 2005, and who were sent to California after Jan. 1, 2002.

In the case in dispute, two non-U.S. citizen employees, Gopi Vedachalam and Kangana Beri, were sent to the U.S. from India to do software projects.

Before they could receive a paycheck, Vendachalam and Beri alleged that Tata forced them and other non-U.S. citizen employees to sign over their federal and state tax refunds to Tata.

The two men also alleged that Tata deducted their Indiana salary from their U.S. pay depriving them of California wages. Both actions are a violation of California Labor Law.

Tata America International Corporation, Tata Consultancy Services, Ltd and Tata Sons, Ltd are named as defendants in this action.  Tata Consultancy Services, Ltd (TCS) is an information-technology-outsourcing and consulting company incorporated in India.

Tata Sons, Ltd is the parent company of TCS and is also incorporated in India.
Tata America International Corporation is a United States subsidiary of TCS

Gopi Vedachalam is one of two plaintiffs in the suit.
Vedachalam is a citizen of India who has worked for one or more of the defendant entities 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 Hayward, California. Since 2003, Vedachalam has worked in Woodland Hills, California.

Vedachalam filed his complaint initiating this action on February 14, 2006.
 He filed a first amended complaint on June 5, 2006.
The amended complaint contains allegations related to both Vedachalam and co-plaintiff Kangana Beri.

Vedachalam alleges that defendants, through a visa petition signed under penalty of perjury, represented that Vedachalam would receive a salary of $74,000 per year during his
deputation in the United States, but that he did not receive this amount of salary in 2004 or 2005 and is not currently receiving this amount of annual salary.

In addition, Vedachalam alleges that defendants forced him to endorse his tax refund check
over to TCS by stamping the back of the check “[p]ay to the order of
* * * Tata Consultancy Services.”

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

Vedachalam is a plaintiff in six of the nine claims alleged in the complaint:

(1) breach of contract for failing to pay the salary promised in the Deputation Terms Agreement;

(2)conversion of tax refunds;

 (3) unjust enrichment through retaining tax refunds;

(4) violation of California Labor Code § 221 (which provides that it “shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid”);

(8)violation of California Labor Code § 226 (which requires that the employer provide accurate statements showing gross wages and deductions);

(9) “false, unfair, fraudulent and deceptive business practice within the meaning of [California] Business and Professions Code §§ 17200” necessitating injunctive relief on behalf of themselves and the public.

Investigation Details –

The class action 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 the California Labor Code Section 221, which provides 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.
The complaint states that Tata violated California law by improperly classifying employees as exempt from overtime pay, and failed to pay empolyees for work in excess of eight hours a workday and forty hours a workweek.
The complaint states further that Tata's vacation pay policy does not comply with California law.

On February 14, 2006, Lieff Cabraser Heimann & Bernstein had filed a nationwide class-action lawsuit against Tata Sons.

The suit said the Tata group had unfairly asked all its non-US employees to endorse and sign their federal and state tax refund cheques to the company.

It also alleged the company had taken unauthorised deductions from employee pay cheques.

In April 2012, judge Wilken had issued an order granting class-action status to the suit that accused Tata Sons and its subsidiary, TCS, of breaching employment contracts and violating the California labour code.

 In June 2006 and April 2007, Tata America International Corporation and its parent corporations, TCS and Tata Sons, filed a motion to dismiss the case, arguing it should be arbitrated in India, not the US. Lieff Cabraser opposed the motion.

In November 2006 and June 2007, the court heard arguments on the motion.

Finally Tata Consultancy Services (TCS), agreed to pay $29.8 million (Rs 161 crore or Rs. 158 Crore) to settle a suit filed by two of its former employees.

The details of the settlement were not available. The terms of settlement were described in a February 21 filing with US district judge Claudia Wilken in Oakland, California

Above type of suits are not possible in India as In India we do not have any class law suit system or such type of legal thinking.

India has to learn lot from USA in every thing from freedom of speech to first amendment and legal system and punishment count system.

Reality views by sm –

Wednesday, February 27, 2013

Tags – TCS California US 30 Million 158 161 Crore