TCS to pay $30 million to settle wage dispute in California

Last Updated: Wed, Feb 27, 2013 05:03 hrs

Tata Consultancy Services (TCS), India's largest information technology services provider, has agreed to pay $29.8 million (Rs 161 crore) to settle a suit filed by two of its former employees.

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

When contacted, a TCS spokesperson said, "TCS believes it has always acted appropriately, notwithstanding the allegations in this case. The company has admitted no wrongdoing and none has been found by the court. It agreed to settle this matter to eliminate any ongoing distraction to its associates and management."

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, said a Bloomberg report.

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.

TCS is not the first Indian company to be pulled up by a US court. After Infosys employee Jack Palmer complained the company was misusing B1 visas, it was pulled up by a US court. Though the company is facing a grand jury investigation in the US over the alleged visa misuse, last year, US district judge Myron H Thompson dismissed Palmer's case of harassment, saying he couldn't ask Infosys to pay.

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