In a recent class action complaint filed in federal court in San Francisco against a major Indian outsourcing firm, a former employee has claimed systematic discrimination, accusing the firm of favoritism toward workers of South Asian descent in the US. If this class action moves forward, it has the potential to create public relations challenges for many leading outsourcing providers and political challenges regarding professional visa laws.

The complaint alleges that 95% of the outsourcing firm’s workforce in the US is of South Asian descent, and that the firm favors those workers in its hiring, firing, and promotion practices. The complaint seeks class certification for employees and applicants since 2011 who are not of South Asian descent or from India, Bangladesh, or Nepal.

The complaint also implicates the practice of employing Indian workers through the use of H-1B visas; from 2011 to 2013, the defendant sponsored an estimated 20,000 new H-1B visas for workers from India. As this class action moves forward, it has the potential to fuel debate surrounding the use of professional visas by outsourcing firms in the US. In a recent Senate Judiciary Committee hearing, several senators suggested that H-1B visas were potentially being used to replace workers in the US with foreign hires. If this complaint or similar future complaints against other outsourcing firms in the US gain traction, it could complicate industry efforts to raise or eliminate the annual cap on H-1B visas.

We will continue to monitor this issue as it develops.