Indian programmer wins case for H-1B visa holders
May 2nd 2001, 7:41 pm
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Indian programmer wins case for H-1B visa holders Reuters (San Francisco, May 2)
IN A legal victory for hundred of thousands of foreign high-tech workers in the
United States on H-1B visas, an Indian computer programmer has successfully sued his
Silicon Valley recruitment firm to escape a work contract that levied steep fines for
leaving early.
Dipen Joshi left Gujarat in March 1998 to work on a H-1B visa for California-based
recruitment firm Compubahn, where he signed a contract requiring him to remain with
the firm for 18 months or pay stiff penalties.
But when he tried to leave for a full-time job at software giant Oracle before his
contract ended, the recruitment firm handed him a bill for some $77,000 in fees and
penalties.
Joshi sued in San Mateo Superior Court where Judge Phrasel Shelton eventually ruled
Joshi's contract was "void and unenforceable" because it violated state unfair
competition statues.
In doing so, Shelton also struck down conditions on all similar Compubahn
contracts that required such things as "finders fees," or levied fines for leaving
early. The judge also ordered Compubahn to pay Joshi some $215,000 in legal fees
and other expenses.
The ruling, which affects about 38 such Compubahn contracts, was also a victory for
the hundreds of thousands of foreign professionals in the U.S. high-tech sector
working on H-1B visas and could set off a flood of similar lawsuits, Joshi's lawyer
Michael Papuc said recently.
About half of these visa holders work directly for major technology firms such as
Oracle or Sun Microsystems Inc. but the rest end up at recruitment firms under
restrictive contracts -- making it likely Joshi's legal win will spark similar
lawsuits, he said.
FLOOD OF SIMILAR CASES
"There is going to be flood of these cases," said Papuc, who estimated about half of
all H-1B visa holders are Indian. "It has become overwhelming and I am taking 10 to
15 calls a day from workers and law firms from around the country."
Compubahn spokesman Michael Turpel disagreed with the judge's ruling, saying the
issue was about interfering with business operations, rather than stifling
competition. He added the firm was weighing its options and may appeal.
"When you convert the contract to your own deal you are really interfering with the
business operations of the company that hired you," said Compubahn spokesman
Michael Turpel.
Joshi signed an 18-month contract with Compubahn in March 1998, not realizing the
firm would farm him out to software firms in Silicon Valley.
A year later, however, when software giant Oracle offered Joshi permanent employment,
Compubahn demanded about $77,000 for the finder's fee, a penalty fee for joining a
client and other expenses.
Joshi, in turn, sued for fraud, misrepresentation and violations of state law against
unfair competition which voids any contracts that restrain trade and the free
movement of employees.
The judge eventually ruled the contract was too strict and ordered the firm to
stop using it.
The U.S. H-1B visas offer an opportunity to earn good money in the lucrative
high-tech sector, although recent layoffs in Silicon Valley have worried many because
if they lose their jobs they also stand to lose their right to stay in the country.
The visas are good for three years and can be extended for another three. Before that
term runs out, many holders apply for permanent residency - a stepping stone to U.S.
citizenship.
Until 1998 the yearly quota of such H-1B workers was 65,000. That year, as the high
technology field exploded, it was raised to 115,000. In 2000, with the Internet
revolution roaring ahead, it went up to 195,000 for each of the next three years.
IN A legal victory for hundred of thousands of foreign high-tech workers in the
United States on H-1B visas, an Indian computer programmer has successfully sued his
Silicon Valley recruitment firm to escape a work contract that levied steep fines for
leaving early.
Dipen Joshi left Gujarat in March 1998 to work on a H-1B visa for California-based
recruitment firm Compubahn, where he signed a contract requiring him to remain with
the firm for 18 months or pay stiff penalties.
But when he tried to leave for a full-time job at software giant Oracle before his
contract ended, the recruitment firm handed him a bill for some $77,000 in fees and
penalties.
Joshi sued in San Mateo Superior Court where Judge Phrasel Shelton eventually ruled
Joshi's contract was "void and unenforceable" because it violated state unfair
competition statues.
In doing so, Shelton also struck down conditions on all similar Compubahn
contracts that required such things as "finders fees," or levied fines for leaving
early. The judge also ordered Compubahn to pay Joshi some $215,000 in legal fees
and other expenses.
The ruling, which affects about 38 such Compubahn contracts, was also a victory for
the hundreds of thousands of foreign professionals in the U.S. high-tech sector
working on H-1B visas and could set off a flood of similar lawsuits, Joshi's lawyer
Michael Papuc said recently.
About half of these visa holders work directly for major technology firms such as
Oracle or Sun Microsystems Inc. but the rest end up at recruitment firms under
restrictive contracts -- making it likely Joshi's legal win will spark similar
lawsuits, he said.
FLOOD OF SIMILAR CASES
"There is going to be flood of these cases," said Papuc, who estimated about half of
all H-1B visa holders are Indian. "It has become overwhelming and I am taking 10 to
15 calls a day from workers and law firms from around the country."
Compubahn spokesman Michael Turpel disagreed with the judge's ruling, saying the
issue was about interfering with business operations, rather than stifling
competition. He added the firm was weighing its options and may appeal.
"When you convert the contract to your own deal you are really interfering with the
business operations of the company that hired you," said Compubahn spokesman
Michael Turpel.
Joshi signed an 18-month contract with Compubahn in March 1998, not realizing the
firm would farm him out to software firms in Silicon Valley.
A year later, however, when software giant Oracle offered Joshi permanent employment,
Compubahn demanded about $77,000 for the finder's fee, a penalty fee for joining a
client and other expenses.
Joshi, in turn, sued for fraud, misrepresentation and violations of state law against
unfair competition which voids any contracts that restrain trade and the free
movement of employees.
The judge eventually ruled the contract was too strict and ordered the firm to
stop using it.
The U.S. H-1B visas offer an opportunity to earn good money in the lucrative
high-tech sector, although recent layoffs in Silicon Valley have worried many because
if they lose their jobs they also stand to lose their right to stay in the country.
The visas are good for three years and can be extended for another three. Before that
term runs out, many holders apply for permanent residency - a stepping stone to U.S.
citizenship.
Until 1998 the yearly quota of such H-1B workers was 65,000. That year, as the high
technology field exploded, it was raised to 115,000. In 2000, with the Internet
revolution roaring ahead, it went up to 195,000 for each of the next three years.
