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Indian Wins Damages for Strict Work Contract

S Pasha

In a victory that could pave the way for future lawsuits by H-1B workers, a Californian court has ruled that a consulting firm must pay $ 215,000 in legal costs to an Indian tech worker who sued over a strict work contract.

The firm, Compubahn, has been ordered to pay Dipen Joshi, a 33-year-old programmer from Gujarat, India. Joshi sued Compubahn in January 2000 for fraud, misrepresentation and violation of a California statute against unfair competition.

'The fact that this award came out sends a message to body shops: I'm on to you now, so watch out,' Joshi's lawyer, Michael Papuc, told CNET. Though he did not return phone calls to his office on Thursday, Papuc had said previously that he is compiling a list of H-1B visa holders, claiming they have unfair and strict work contracts, and hopes to file a class-action lawsuit against Compubahn and possibly other agencies.

Assistant for Compubahn attorney Navneet S Chugh said he was not taking calls on Thursday, but Chugh told CNET that he plans to appeal the court decision. Chugh claims the ruling, based on a California code forbidding contracts that restrict an individual's right to pursue a career, should not necessarily apply to employment agencies.

'It's simply not right to apply this to employment agencies,' Chugh told CNET. He is the founder of The Chugh Firm in Cerritos, Calif, which represents recruitment agencies. After bringing over someone from India, providing for them and getting them a job, 'then four days later they join Oracle, [is] that legal?' he asked.

Joshi came to America in March 1998 to work for Compubahn, which he thought was a computer programming company serving big companies like Oracle and Sun Microsystems. Instead he learned it was a recruitment firm that placed foreign programmers in US companies that did not have enough full-time, permanent workers.

His contract with Compubahn contained a number of clauses that carried stiff penalties if he violated them: it required him to remain with the firm for at least 18 months or face fine; he would be required to pay a $ 25,000 'finder's fee' to the firm if he found a job; he was forbidden from working directly for any of Compubahn's clients or having 'a meeting to discuss the possibility' of doing so for a year after his departure; and he was required to pay all relocation and immigration costs if he left the firm within 18 months.

Six months after coming to the US, Compubahn placed Joshi at Oracle. Joshi claimed that Compubahn's bosses wanted him to get a full-time, permanent job with Oracle.

In June 1999, Joshi accepted an offer to join Oracle, and Compubahn promptly sent him a letter demanding $ 77,085 for the finder's fee, a penalty for joining a Compubahn client and expenses that Compubahn incurred.

On February 27, 2001, a judge ruled that Compubahn's contract was too strict and ordered the company to stop using it. Last week, the court told all parties that Compubahn must pay $ 207,051.50 in attorney fees and $ 7,999.11 in other costs to Joshi.

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