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Corporate Aug 14, 2012

High stakes for Infosys as visa fraud case trial begins next week

By Uttara Choudhury

New York: Despite lawsuits and whistle-blowers tumbling out of the woodwork, Infosys has been in defiant denial. It blew an opportunity to settle the Jay Palmer lawsuit last month. Instead of quashing the case, Infosys is firmly denying allegations that it engaged in systematic visa fraud.

Claims that Infosys routinely brought Indian tech workers into the US on B-1 visas to do work that actually required an H1-B visa will be heard at trial on 20 August at 10 am in the US Courthouse in Montgomery, Alabama. Judge Myron H Thompson has indicated that jury selection and trial of the case is set to last four days.

It's for the first time that a visa use violation case linked to outsourcing will be heard before a US jury. The trial is sparking intense US media coverage as Infosys is being accused of killing America jobs by bringing low-paid engineers from Bangalore into the US illegally for everything from coding software to testing software.

"The broader issue, offshore outsourcing and US visa policy, isn't on trial. But who knows what the jury will be thinking as this trial unfolds in a year when outsourcing is a leading election issue," wrote Patrick Thibodeau in Computerworld.

Potential fallout

The trial is sparking intense US media coverage as Infosys is being accused of killing America jobs by bringing low-paid engineers from Bangalore into the US illegally for everything from coding software to testing software.

Infosys has been tight-lipped about its defence, and once the trial begins there's no telling how it will pan out. But if the jury in Alabama winds up buying the argument that Infosys flouted visa laws and then shut up a whistle-blower, it could really damage Infosys. The company has a bulk of its business in the US.

American companies certainly don't want their name attached to an Indian outsourcer which has employees on incorrect visas. According to Forrester analyst Stephanie Moore, Infosys clients were "examining their contractual exit clauses and making sure they are prepared to exit should the need arise."

She wrote on Forrester's website that clients are thinking of "contingency plans" to protect themselves from risk in case Infosys, the company most identified with jobs being "Bangalored" becomes an "election-year scapegoat for American job loss."

More significantly, if Infosys is incriminated it could set off calls for anti-outsourcing legislation that will impact other Indian firms. US lawmakers are bound to exploit the Infosys case to question if the practice of improperly using business travel visas is common for Indian outsourcers that send workers to client sites. If Infosys loses, it may also trigger more stringent vetting for work visas at the US embassy and consulates in India. Make no mistake; it will boil down to more paperwork, headaches and hassles for Indian work visa seekers.

Palmer's lawsuit

Palmer, a principal consultant at Infosys, claims he was harassed at work and even received death threats after he complained of visa abuses through the company's whistleblower programme. A second lawsuit with similar claims was filed this month by a former Infosys employee.

Some of the key testimony next Monday will come from Marti Harrington, a former Infosys employee who also blew the whistle. She is on the witness list submitted to the court by Palmer's attorney. In an affidavit filed with the court, Harrington talked about the discrimination she suffered after speaking out against visa misuse at Infosys.

"My client, Jay Palmer is looking forward to having a public trial so that he can prove that everything he has described about Infosys violating the B1 visa program is correct. He was upset when Infosys called him a liar. He is looking forward to this trial where he can present all the evidence," Palmer's trial lawyer Kenneth J Mendelsohn earlier told Firstpost.

Infosys had first tried in December last year to get its employee Palmer to settle the case, to avoid having all of its dirty laundry aired in open court. According to people close to the negotiations, things backfired after Infosys chief marketing officer Paul Gottsegen called Palmer a liar and a fortune hunter. When Palmer demanded a public apology, Infosys baulked.

The civil lawsuit brought 17 months ago by Palmer against Infosys has already spawned a criminal investigation by US authorities into the visa practices of the Indian software giant. Attempts by Infosys to portray Palmer as a lone wolf who's spreading "falsehoods" about the company, also fell flat after two other Infosys managers in the US submitted damning internal whistleblower reports of visa fraud.

All three whistle-blowers, including Palmer have said Infosys misused short-term B1 visitors' visas to bring in low-cost engineers from India. They have submitted internal reports pointing to Indians on business visitor visas who were working full time at client sites and Infosys was billing for their work. This is illegal as a B-1 visa is only valid for entry into the US for attending meetings and training.

Infosys says Palmer forged documents

According to Palmer, telling documents come from an internal Infosys website. One document appears to be a "do's and don'ts" list that gives Infosys employees instructions on how to beat the US visa system by omitting employment truths.

Infosys, has filed a motion in courts to dismiss two exhibits of evidence, including the "do's and don't" list submitted by Palmer, alleging that Palmer's documents may be forged.

"Palmer's allegations may make an interesting story, but the case before the court isn't about a story. It's about facts and the facts are clear and compelling," Infosys said in a statement.

Infosys media spokesperson for the Americas, Danielle D'Angelo, told NDTV, "We have not retaliated against any employee and look forward to presenting the argument in court on August 20."

Infosys has about 1,50,000 employees, $7 billion in revenue and a $4 billion war chest for major acquisitions.

by Uttara Choudhury

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