Cognizant H-1B Strategy Disadvantaged Non-Indian Workers, Court Rules

(CALIFORNIA, USA) A federal jury in California has found that Cognizant Technology Solutions discriminated against thousands of non-Indian employees by building a staffing model that favored H-1B visa holders from India, in a decision that could force major changes in how global tech companies manage their workforces.

The case, Palmer v. Cognizant Technology Solutions Corp., No. 17-6848-DMG (C.D. Cal.), focused on claims that non-visa workers—mostly American and non-South Asian staff—were denied roles, pushed onto internal “benches,” and fired at far higher rates than their Indian colleagues between 2013 and 2022. The jury found Cognizant liable for intentional discrimination and for creating policies with a disparate impact on workers of different national origins, one of the strongest courtroom challenges to visa-heavy staffing in the U.S. tech industry to date.

Key findings and statistics

• The jury concluded that non-Indian employees were 8.4 times more likely to be terminated than Indian or South Asian workers during the nine-year period covered by the case.
• A class of more than 2,300 non-Indian employees was found to have suffered harm under these practices, exposing Cognizant to potentially substantial back pay awards and additional financial penalties.

How the staffing model worked

Central to the case were Cognizant’s internal “Visa Readiness” and “Visa Utilization” policies. The court found these were designed to build a steady pool of H-1B visa holders—mostly Indian nationals—even when no specific job existed at the time of application.

• Cognizant routinely filed large batches of visa petitions based on projected demand rather than confirmed positions, according to plaintiffs.
• Many visa workers were kept “on the bench” until suitable projects emerged.
• Non-visa employees placed on the bench faced strict five-week deadlines to find a new assignment before being terminated.

The jury concluded that this combination resulted in Indian H-1B employees being preferentially staffed onto projects, while non-Indian workers were cycled out.

Evidence and allegations

Evidence presented at trial included:

• Detailed statistical analyses showing preferential staffing of H-1B workers for billable assignments once they arrived in the U.S. 🇺🇸.
• Internal company documents describing how hiring and project allocation were structured around large numbers of H-1B workers.
• Testimony about allegedly fraudulent invitation letters signed by a former Cognizant executive to support visa applications for roles that did not exist—used, plaintiffs argued, to secure H-1B approvals for phantom positions and stockpile visa-ready workers.
• Data showing Black employees and other non-Indian workers were fired at sharply higher rates, while Indian H-1B holders were kept in roles or quickly reassigned when projects ended.

Legal conclusions and potential consequences

The decision, issued by Chief District Judge Dolly Gee of the U.S. District Court for the Central District of California, goes beyond past criticism of outsourcing giants by formally tying visa-heavy staffing strategies to violations of U.S. civil-rights law.

• Judge Gee emphasized that discrimination claims do not require an explicit policy that says “hire Indians first” or “fire Americans first.”
• Civil-rights law also targets policies that appear neutral but create a disparate impact on protected groups, including workers of different national origin or ethnicity.
• The jury’s finding of intentional discrimination opened the door to punitive damages, and jurors recommended that Cognizant face such penalties—triggering a second trial phase to determine the amount.

Punitive damages are reserved for conduct considered especially harmful or reckless; they are intended to punish the defendant and deter similar behavior across the industry.

Analysts (e.g., VisaVerge.com) note that the combination of intentional discrimination and disparate‑impact findings places Cognizant among a small number of large tech firms facing this level of legal exposure over employment bias tied to visa use.

Broader industry and policy implications

Critics of the H-1B program have long argued that some outsourcing and consulting firms treat visa holders as a lower-cost, more “controllable” workforce—willing to accept uncertain bench time and rapid transfers to maintain immigration status.

• Power imbalance: H-1B workers are tied to their sponsoring employer, and losing a job can quickly jeopardize legal status.
• Incentive to favor visa holders: That vulnerability can tempt companies to favor visa workers over U.S. citizens and permanent residents when deciding who stays and who goes.

The Cognizant ruling gives these arguments legal weight, confirming that aggressive visa-based staffing can cross the line into unlawful discrimination.

At the same time, the decision raises risks for foreign professionals who rely on the H-1B visa, which covers “specialty occupation” roles requiring at least a bachelor’s degree. Official information about the program is published by U.S. Citizenship and Immigration Services.

Expected employer responses

Industry lawyers and companies may respond in several ways:

1. Reduce the number of H-1B filings or tighten sponsorship policies.
2. Increase hiring of U.S. citizens and permanent residents, even at higher wage levels.
3. Move more work offshore or accelerate shifts toward offshore delivery centers or hybrid models.
4. Tighten internal controls and documentation around project assignments to prove staffing decisions are merit-based, not nationality-driven.

These changes may include hiring freezes, restructuring, or mass layoffs that could affect both visa and non-visa staff.

Impact on employees and job-seekers

For students and early-career professionals from India and elsewhere who hope to work in American tech roles via H-1B sponsorship, the ruling is sobering.

• H-1B status has never guaranteed job security, and the case highlights how vulnerable visa holders can be if companies abruptly change direction to cut legal risk.
• Some candidates may see fewer H-1B opportunities or more stringent employer practices.
• Others may opt for remote or local employment rather than rely on a U.S. visa tied to a single firm.

Practical steps for job seekers include researching an employer’s history and asking targeted questions during the hiring process:

• Has the company been sued over visa-based staffing or faced investigations?
• Does the employer have a reputation for large benches and frequent layoffs?
• How are assignments made, how long do bench periods last, and are performance reviews transparent?

Political and regulatory context

The case fits into a broader political and regulatory climate concerned about what some officials call “anti-American bias” in hiring. Agencies such as the EEOC and the Department of Justice have brought enforcement actions against employers that favored temporary foreign workers over U.S. citizens and permanent residents.

• The formal recognition of disparate impact in Cognizant’s practices provides a concrete model for how visa-based discrimination can operate without explicit written rules.
• Lawyers expect employees at other firms to examine termination and staffing data for patterns similar to those uncovered at Cognizant.

Takeaways

Immigration policy, corporate staffing strategy, and worker protection are tightly linked. The H-1B program remains important for global tech talent, but courts are making clear it cannot be used as a blunt tool to reshape workforces in ways that sideline non-visa workers—especially when those workers are overwhelmingly American and non-South Asian.

For companies: treat H-1B sponsorship as one part of a fair, transparent hiring system, not a shortcut that tilts opportunity toward a single nationality.

For workers: plan careers with awareness of structural risks, not assumptions that a visa alone guarantees security.