/ciol/media/agency_attachments/c0E28gS06GM3VmrXNw5G.png)
Follow UsMichael Kahn
SAN FRANCISCO: 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 US
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 US 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 US 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.