Christy Palmer Et Al V. Cognizant Technology Solutions Corporation Et Al

Case Background

Plaintiffs Christy Palmer, Vartan Piroumian, Edward Cox, and Jean-Claude Franchitti initiated this employment action for themselves and a class of similarly affected individuals in 2017. They sought to address ongoing discrimination based on race and national origin by Defendants Cognizant Technology Solutions Corporation and Cognizant Technology Solutions U.S. Corporation (collectively referred to as “Cognizant”).

The Plaintiffs represented over 2,000 former employees who were neither South Asian nor Indian and who had been terminated while on the bench. They alleged that Cognizant practiced a pattern of discrimination that favored South Asian employees and those of Indian national origin in its termination decisions.

The case was filed in the United States District Court, California Central (Western Division – Los Angeles). The case was assigned to Judge Dolly M. Gee and referred to Magistrate Judge Gail J. Standish. [Case number: 2:17cv6848]

Cause

Cognizant is an American multinational corporation that provides information technology and consulting services globally. Employing around 40,000 people in the United States, the company has a predominantly South Asian workforce—over 75%—despite South Asians making up only 12% of the U.S. IT industry. This significant imbalance has raised concerns about discriminatory hiring practices favoring South Asians, particularly Indians, in areas such as hiring, promotions, and terminations.

Business Model

Cognizant operates approximately 37 offices across the U.S. and reported over $13.4 billion in revenue for fiscal year 2017. A substantial portion—78%—of its revenue is derived from North America, primarily the U.S. The company’s business model involves contracting with U.S. companies for IT services and hiring individuals to fulfill those roles. When projects conclude or Cognizant removes employees, the company places them in a Corporate Deployment Pool, commonly called being “benched,” where they must search for new roles.

Discriminatory Practices

Critics have highlighted several practices by Cognizant that demonstrate a clear preference for South Asian employees:

  • Visa Preferences: The company prioritizes South Asians for U.S. positions requiring H-1B visas, becoming the top recipient of these visas in 2015 and 2016.
  • Fictitious Job Applications: Cognizant has allegedly submitted visa applications for non-existent jobs, creating false invitation letters indicating a need for South Asian employees.
  • Hiring Bias: Both internal and external recruiters at Cognizant favor South Asian candidates, leading to disproportionate hiring.
  • Promotion Discrepancies: South Asians receive promotions at significantly higher rates, with performance ratings often reflecting this bias.
  • Termination Patterns: Non-South Asians face terminations at much higher rates, especially those benched for over five weeks.
Plaintiff Experiences

Palmer’s Experiences

Ms. Palmer joined Cognizant in 2012, bringing nearly 20 years of IT experience. She often found herself replaced by South Asian employees, despite her skills and contributions. For example, after relocating for a client project, she was replaced within four months. When seeking additional staff, Cognizant consistently provided profiles of South Asian candidates, overriding her requests for qualified non-South Asian individuals. Facing a hostile work environment, she resigned in December 2016.

Piroumian’s Experiences

Mr. Piroumian, with over 30 years in software engineering, started at Cognizant in 2012 as an Enterprise Architect. He frequently faced removal from client positions, often replaced by less qualified South Asian employees. Despite receiving strong performance reviews, managers consistently overlooked him for new roles in favor of South Asian candidates. In August 2017, Cognizant terminated his employment after they failed to address his repeated reports of discrimination.

Cox’s Experiences

Mr. Cox, who has over 35 years of IT experience, joined Cognizant in 2014 as an Infrastructure Engagement Manager. Throughout his tenure, he reported to South Asian managers who frequently interrupted him and excluded him from important meetings. Despite his team meeting revenue goals, he received lower bonuses compared to South Asian colleagues. After being benched, he was terminated in April 2017, citing his bench time as the reason.

Franchitti’s Experiences

Dr. Franchitti joined Cognizant in 2007 and became an Assistant Vice President in 2011. Despite managing a large team and generating significant revenue, he never received a promotion after 2011, with most promotions going to South Asian employees. He raised concerns about preferential treatment but faced resistance. His employment was abruptly terminated in July 2016, accompanied by an unjustifiably low-performance rating.

Damages

Cognizant’s intentional discrimination directly caused the Plaintiffs and class members to face significant employment barriers. They were denied job opportunities and were not given a fair chance to secure positions. Additionally, they experienced obstacles regarding career advancement and continued employment at Cognizant. Due to Cognizant’s actions, the Plaintiffs and the class they aimed to represent experienced significant harm. This harm justified the need for punitive damages.

Key Arguments and Proceedings

Legal Representation

  • Plaintiff(s): Christy Palmer | Vartan Piroumian | Edward Cox | Jean-Claude Franchitti
    • Counsel for Plaintiff(s): Amanda E. Burns | Daniel A. Kotchen | Lindsey M Grunert | Mark A. Hammervold | Navid Soleymani | Navid Yadegar | Daniel Low
  • Defendant(s): Cognizant Technology Solutions Corporation | Cognizant Technology Solutions U.S. Corporation
    • Counsel for Defendant(s): Amber Dawn McKonly | Elizabeth Aislinn Dooley | Karl G. Nelson | Katherine V. A. Smith | Lauren M Blas | Matthew Thomas Sessions | Richard Joseph Doren | Theodore J Boutrous, Jr | Michele L Maryott

Claims

Cognizant faced multiple legal claims for discrimination against non-South Asian individuals, violating various civil rights statutes. Under Count I, the Plaintiffs accused the company of racially discriminatory treatment, breaching the Civil Rights Act of 1866 (42 U.S.C. § 1981).  Count II highlighted claims of disparate treatment based on both race and national origin, violating Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e, et seq.). Additionally, Count III addressed the issue of disparate impact on race and national origin under the same Title VII provisions. These claims asserted that Cognizant intentionally favored South Asian individuals in hiring, promotions, and terminations, while simultaneously disadvantaging non-South Asian employees, thereby creating a workforce disproportionately comprised of South Asian workers.

Cognizant systematically discriminated against individuals who were not of South Asian descent. This discrimination manifested in several ways:

(a) The company knowingly and intentionally favored South Asian individuals in employment decisions, including hiring, promotions, and terminations.

(b) Cognizant disfavored non-South Asian individuals, including the plaintiffs, in critical employment decisions, perpetuating an unjust workplace environment.

(c) Furthermore, Cognizant intentionally created and maintained a workforce that overwhelmingly consisted of South Asian employees, making up at least 75% of its U.S. workforce.

This pattern not only marginalized non-South Asian individuals but also reinforced systemic inequalities within the company.

Defense

Cognizant argued that the Plaintiffs’ claims of a hostile work environment were barred unless the Plaintiffs could show that Cognizant knew or should have known about the alleged discrimination and failed to take prompt action. The Plaintiffs’ claims were invalid because the employment actions in question were based on legitimate, non-discriminatory reasons and were not pretexts for discrimination. Cognizant would have taken the same actions anyway for legitimate business reasons.

Moreover, any alleged wrongful conduct by Cognizant’s agents, which the company denied, occurred outside their authority and contradicted Cognizant’s good faith efforts to comply with the law. The Plaintiffs were not entitled to punitive damages, as any such award could violate the U.S. Constitution or the California Constitution. Cognizant did not commit any malicious acts or show reckless indifference to the Plaintiffs’ rights, meaning punitive damages would breach applicable laws and Cognizant’s due process rights.

Additionally, any injuries the Plaintiffs claimed were likely caused by their own actions or those of others beyond Cognizant’s control. These external factors served as intervening causes of the alleged damages. Finally, Cognizant had implemented policies and programs that prohibited discrimination, believing in good faith that it had not violated the Plaintiffs’ rights in any way.

Jury Verdict

On October 04, 2024, the California jury decided on whether Cognizant’s conduct was discriminatory or not. The jury found that Cognizant indulged in discriminatory practices against non-South Asian employees based on race and against non-Indian employees based on national origin, leading to their termination from the bench.

The jury also found that Cognizant’s conduct warranted the award of punitive damages.

A spokesperson for Cognizant expressed disappointment with the verdict and announced the company’s plans to appeal.

“We provide equal employment opportunities for all employees and have built a diverse and inclusive workplace that promotes a culture of belonging in which all employees feel valued, are engaged, and have the opportunity to develop and succeed,” Jeff DeMarrais said in an emailed statement.

Court Documents:

Available upon request

Press Release:

Times of India

The Hindu Businessline