Most trusted Name in the NRI media
Serving over 22 millions NRIs worldwide

NRI sue Tata America International
Corporation on tax refunds

  • Lieff Cabraser Heimann & Bernstein, LLP Announces Filing of Nationwide Class Action Lawsuit Against Tata America International Corporation For Requiring Workers to Hand Over Federal and State Tax Refunds
  • Suit Is Against Subsidiary of One of India’s Largest Conglomerates By Non-U.S. Nationals Working in the U.S.

San Francisco, CA, February 14, 2006
Ram Parsad

Lieff Cabraser Heimann & Bernstein, LLP announced that Gopi Vedachalam, an employee of Tata America International Corporation, filed today a nationwide class action lawsuit in U.S. District Court in San Francisco against Tata America International Corporation, and its parent corporations Tata Consultancy Services, Ltd., and Tata Sons, Ltd. (collectively referred to as “Tata”). Among other allegations, the suit charges that Tata has unjustly enriched itself by requiring all of its non-U.S.-citizen employees to endorse and sign over their federal and state tax refund checks to Tata.

Tata is one of India's largest business conglomerates, with revenues last fiscal year in excess of $17 billion. The proposed class consists of thousands of current non-U.S. citizen employees of Tata working in the United States, plus former Tata employees dating back to 2000.

“Tata’s employees from India and other countries working legally in the United States, including thousands of technical support personnel and project managers, work hard to see that the American corporations they support and Tata are profitable,” stated Lieff Cabraser partner Steven M. Tindall. “These workers are entitled to any amount of taxes they overpaid federal and state tax agencies.”

Tindall noted that this case constitutes one of the first class action lawsuits against a company engaged in “reverse outsourcing,” bringing non-U.S. citizens to the United States to work in U.S. corporations, for violation of labor laws.

The complaint charges that most Tata employees in the United States are non-U.S. citizens. These employees are granted visas, which allow them to work and live in the United States. Tata requires each employee to sign an agreement which states that the employee’s gross amount of compensation will be includable as earnings in the United States and reported to the U.S. Internal Revenue Service. The complaint alleges that these employees are not paid the amount promised them in these agreements.

The complaint alleges further that, at least until July 2005, Tata required its non-U.S.-citizen employees to sign power of attorney agreements delegating an outside agency to calculate and submit each employee’s tax return to state and federal authorities. Tata then required its non-U.S.-citizen employees who received tax refunds from state and federal tax authorities to endorse the tax refund checks and send them back to Tata.

Under California Labor Code Section 221, it is unlawful “for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.” The complaint also charges that Tata’s conduct violates this Code section as well as the common law forbidding unjust enrichment and conversion.

From 2000 to 2003, plaintiff Gopi Vedachalam worked in Hayward, California, as a Tata project manager assigned to Target. Since 2003, he has worked as a Tata project manager for 21st Century Insurance in Woodland Hills, California. “I work hard for Tata and the companies I have been assigned to. I should receive the full wages Tata agreed to pay me, as should all other Tata employees in America. I did not hand over my tax refund checks voluntarily. I tried to recover these wages through Tata’s internal procedures, but I was met with either silence or refusal.”

Mr. Vedachalam is asking the federal court to certify the case as a class action and issue an injunction against Tata, preventing it from requiring its employees to endorse their tax refund checks to the company to the extent it is still doing so. The complaint also seeks compensation and damages for current and former employees who were not paid what they were promised and who were deprived of their tax refunds.

Any comments on this article or you have any news: Click here

Disclaimer will put up as many of your comments as possible but we cannot guarantee that all e-mails will be published. We reserve the right to edit comments that are published.