By Harichandan Arakali
BANGALORE (Reuters) - Infosys Ltd
While a second and similar lawsuit remains, those claims too are unfounded, S.D. Shibulal, chief executive officer of Infosys, India's second-largest software services exporter, told reporters.
In the dismissed lawsuit, Jack Palmer, an Infosys employee in the United States, said he suffered retaliation from the company after accusing it of misusing U.S. B1 visas.
In a U.S. election year, approval and use of work visas for overseas employees sent to client locations in the world's largest economy by Indian outsourcing companies have come under intense scrutiny.
Corporations including Indian outsourcing services providers use thousands of visas to bring in employees mainly from India, a practice seen by some as hurting the American job market.
Palmer's lawyer could not immediately be reached by Reuters for a comment.
"The court ruled that this case doesn't even have enough merit to be tried," Shibulal said. "We are very pleased to consider this matter officially closed ... this is a vindication of our position that we did not retaliate against anyone."
Investors cheered the development with Infosys shares rising as much as 3.7 percent to a six-week high before ending up 2.5 percent, while the BSE Sensex closed 1 percent higher.
Infosys shares, which the market values at about $25 billion, have fallen 13 percent so far this year, underperforming the technology sector index which is down 1 percent, on worries about sluggish earning growth in a weak global economy.
The U.S. court's "decision is a short-term positive," Wells Fargo senior analyst Edward S. Caso wrote in a note to clients after the verdict.
The ruling, by U.S. judge Myron H. Thompson, confirmed that Jack Palmer's claims were "completely unfounded", Infosys said in a statement.
However, Wells Fargo's Caso said that the issue remained unresolved as a second similar case and a separate investigation of Infosys' use of visas were pending.
Satya Dev Tripuraneni, an American ex-employee, said he was harassed by his supervisor after he accused Infosys of visa fraud, according to a lawsuit filed on August 2 in the federal court for the Northern District of California.
"I think we've done the internal investigations. We have found that the claims are completely unfounded, our lawyers are preparing for the defence," Infosys CEO Shibulal said on Tuesday.
In May, Infosys said it and some of its employees had been named in an investigation by a grand jury of the U.S. District Court for the Eastern District of Texas and the investigation was looking into the company's use of various visas.
Separately, the U.S. Department of Homeland Security is also investigating errors in I-9 immigration documentation filed by Infosys, the company has said. Shibulal did not provide an update on these investigations on Tuesday.
(Additional reporting by Manoj Dharra in Mumbai; Editing by Rafael Nam and David Cowell)