Updated May 15, 2026
Cognizant H-1B Visa Discrimination Lawsuits Surge Against U.S. Workers
Cognizant H-1B visa discrimination lawsuits have resulted in a federal jury finding the IT giant liable for systematically favoring Indian workers over equally qualified American employees. The verdict affects 2,200 class members who faced termination rates 8.4 times higher than their H-1B visa holder counterparts. This landmark case exposes how visa sponsorship programs can enable national origin discrimination under the guise of legitimate business practices. California employers and workers nationwide now face heightened scrutiny as federal agencies intensify enforcement. This article examines the jury's findings, the discriminatory employment practices uncovered, and compliance steps employers must take to avoid similar liability.
Cognizant Found Liable for Pattern of Discrimination Against Non-Indian Workers
On October 4, 2024, a California federal jury delivered a unanimous verdict finding Cognizant Technology Solutions engaged in a pattern or practice of intentional discrimination against non-South Asian and non-Indian employees. The decision followed a two-week trial and affected a class of over 2,300 workers terminated from the company's internal bench between September 2013 and October 2022. This verdict came after a previous trial in June 2023 ended with a hung jury, where six of eight jurors had favored the plaintiffs.
The Jury's Verdict on Intentional Discrimination
The jury concluded that Cognizant engaged in systematic discrimination favoring South Asians and Indian nationals, particularly those with H-1B visa sponsorship. Chief U.S. District Judge Dolly Gee had certified the class in October 2022, covering non-South Asian and non-Indian employees in mid-level positions, specifically job bands 33-65, except 53. The Washington, DC-based litigation boutique representing the plaintiffs proved that Cognizant used policies and practices related to hiring, promotion, and termination that had a disparate impact on the basis of national origin and race. Furthermore, the jury determined that punitive damages were appropriate given the nature of Cognizant's conduct.
Statistical Evidence Shows 8.4 Times Higher Termination Rate
Plaintiffs presented extensive statistical evidence demonstrating the discriminatory impact of Cognizant's employment practices. The data revealed that non-Indian and non-South Asian employees were 8.4 times more likely to be terminated from the bench than their counterparts. Among all mid-level IT workers Cognizant employs in the United States, there are more than five times as many employees from India than from any other national background. The Equal Employment Opportunity Commission issued a final letter of determination stating that Cognizant had engaged in a pattern or practice of discrimination against non-Indians. A Howard University professor testifying as an expert witness told the jury that 99% of Cognizant's H-1B visa workers being from India was "unusual" and demonstrated a "cultural preference". Statistical analysis presented at trial showed the probability that Cognizant's behavior wasn't racially biased was approximately one in a billion.
What the 'Benching' Process Reveals About Employment Practices
Cognizant's internal benching process functioned as the mechanism through which discrimination occurred. The company placed employees on standby status, called the "bench," after they completed a task or project when no immediate assignment was available. If an employee remained benched without being staffed on a new project within five weeks, Cognizant terminated that employee. The evidence showed that Cognizant favored Indian and South Asian employees by staffing these workers on new projects while leaving other employees benched and subject to termination. A former employee testified that Cognizant's preference for hiring workers from India through the h1b visa cognizant program was not just a preference but "a mandate". The plaintiffs alleged they were terminated after being benched with no work for five weeks and then replaced by "visa-ready" workers from India deployed to U.S. projects and assignments.
How Did Cognizant's Visa Sponsorship Program Create Discriminatory Outcomes?
Cognizant's systematic discrimination against non-Indian workers stemmed from interconnected policies designed to maximize the deployment of H-1B visa holders from India. The company implemented what it termed "Visa Readiness" and "Visa Utilization" programs that fundamentally reshaped staffing priorities and created measurable disparate outcomes for American workers.
Preferential Staffing for H-1B Visa Holders
Cognizant's "Visa Readiness" policy directed the company to apply for substantial numbers of H-1B visas based on projected growth and future needs, creating a pool of "travel ready" employees to fill U.S. roles even when those positions did not exist at the time of visa applications. Chief District Judge Dolly Gee of the U.S. District Court for the Central District of California held that these policies had a disparate impact on non-South Asian and non-Indian employees, resulting in disparate terminations from the bench during the class period of December 15, 2016 to October 27, 2022.
The company instructed supervisors to deploy associates with approved visas within six months. When new business opportunities arose, managers would staff client projects with visa-holding employees from India rather than non-Indian team members already in the U.S. and available for the work. Jean-Claude Franchitti, a former director with a PhD in computer science, testified that he was forced to sign hundreds of fraudulent invitation letters supporting h1b visa cognizant applications for jobs that didn't exist. These allegedly fraudulent letters formed part of Cognizant's scheme to secure vast numbers of H-1B visas and build a "robust inventory" of Indian nationals to be placed in U.S. companies when opportunities arose.
The Five-Week Bench Termination Policy
The five-week bench termination policy operated as the enforcement mechanism for Cognizant's visa preference system. When employees completed projects without immediate reassignment, they entered bench status at full pay and benefits. After five weeks without placement on a revenue-generating customer project, Cognizant terminated the employee. The evidence demonstrated that Indian and South Asian employees, particularly visa holders, received priority placement on new projects, leaving other employees benched until termination.
Federal wage data shows that while median inflation-adjusted pay in the broader IT industry held flat since 2020, pay for Cognizant's H-1B workers fell by 20%. The company used the H-1B program mostly to fill lower-level positions such as IT system analysts and administrators. Fewer than 20% of the 6,400 visa holders Cognizant sponsored since 2020 had a master's degree or higher.
Why South Asian and Indian Employees Received Different Treatment
Former employees identified multiple reasons for Cognizant's preference for visa workers beyond cost savings. H-1B workers proved more willing to accept inconvenient or less-favorable assignments because their visas tied them to specific employers. When H-1B workers sought new positions, they had to persuade new employers to assume the expense and trouble of transferring their visas, creating obstacles in the U.S. job market.
A global executive who managed over 1,000 employees stated that the company's preference for Indian H-1B workers was intrinsic to its outsourcing business model because they are almost always the cheapest labor option. Cognizant's most recent annual report identified legislation requiring higher pay for visa workers as one of several "risk factors" facing the company. According to 2023 data submitted to the EEOC, 70% of Cognizant's professional and managerial staff reporting to its operational headquarters in Texas identified as Asian.
What Do These Lawsuits Mean for the 2,200 Class Members?
The unanimous jury verdict established liability for a class of approximately 2,200 employees terminated from Cognizant's bench between 2013 and October 2022. However, the trial proceeded under a bifurcated framework that separated the determination of whether discrimination occurred from the calculation of individual damages owed to each class member.
Compensatory Damages Still to Be Determined
The jury found Cognizant liable but did not determine damages during the initial phase. In reality, the court structured the case using the Teamsters framework, which divides the trial into distinct phases. Phase I addressed whether Cognizant engaged in a pattern or practice of intentional discrimination and the availability of punitive damages. Phase II will address individual claims and defenses.
Individual hearings will determine whether each class member qualifies for monetary awards. The potential compensation includes back wages for lost earnings during unemployment, front wages for future lost earnings, emotional distress damages, and punitive damages. Class members who wish to participate in the second phase to seek monetary rewards will receive notification about how to participate. The exact process for individual hearings will be determined after the first stage of trial.
By the time Phase Two proceedings begin in early 2026, the court will have established protocols for evaluating each terminated employee's claim. No money is currently available because the court has not yet determined individual entitlements, and the parties have not settled the case. There is no guarantee that money will be obtained for every class member.
Punitive Damages Phase Begins with New Jury
Compensatory and punitive damages will be assessed during a second phase of the trial with a new jury. The October 2024 jury unanimously found that punitive damages are appropriate given the nature of Cognizant's conduct. This finding means the company faces additional financial penalties beyond compensating workers for their actual losses.
A separate case involving former executive Jean-Claude Franchitti demonstrated the potential scale of damages in h1b visa cognizant discrimination cases. A Manhattan jury awarded Franchitti $4.20 million in compensatory damages and $4.20 million in punitive damages for a total of $8.40 million. Franchitti had complained about Cognizant's use of the H-1B program as a tool of discrimination in the 18 months prior to his termination.
Disparate Impact Claims Await Judge's Decision
While the jury determined Cognizant engaged in a pattern or practice of intentional discrimination, the judge will make a separate determination on the disparate impact of the company's actions. The disparate impact claim will be decided by the court rather than a jury.
Chief District Judge Dolly Gee of the U.S. District Court for the Central District of California issued an order holding that Cognizant's "Visa Readiness," "Visa Utilization," and related policies and practices had a disparate impact on non-South Asian and non-Indian employees. The ruling stated these policies resulted in disparate termination of non-South Asian and non-Indian employees from the bench during the class period of December 15, 2016 to October 27, 2022. This disparate impact ruling came just days before leaders at the Department of Justice announced a policy change in how the agency would handle those cases.
Federal Agencies Intensify Enforcement Against Anti-American Workforce Discrimination
Federal agencies launched coordinated enforcement actions targeting employers who discriminate against American workers in favor of H-1B visa holders. The Justice Department relaunched its Protecting U.S. Workers Initiative and secured multiple settlements, while the Department of Labor initiated Project Firewall to investigate visa program abuses.
DOJ's Protecting U.S. Workers Initiative Targets Visa Preference
The Justice Department secured its first settlement under the relaunched initiative with Epik Solutions, a California technology recruiting company that preferred H-1B visa holders over U.S. workers. Epik Solutions paid $71,916 in civil penalties, underwent training, and revised employment policies to cease discriminatory job advertisements. Assistant Attorney General Harmeet K. Dhillon stated that companies engaging in such discrimination are on notice that federal authorities will no longer look the other way on American workforce protection.
The Civil Rights Division warned that employers violate the Immigration and Nationality Act's anti-discrimination provisions when they maintain hiring preferences favoring H-1B visa holders over U.S. workers. Employers cannot defend decisions to hire foreign workers over Americans by relying on client preferences, cost considerations, or assumptions about work ethic of certain national origin groups.
EEOC Publishes New Guidance on National Origin Discrimination
The Equal Employment Opportunity Commission released new and updated educational materials on national origin discrimination. The agency emphasized that Title VII of the Civil Rights Act prohibits employment discrimination based on national origin, including U.S. nationality. Employers with 15 or more employees face liability for discrimination in hiring, firing, recruitment, compensation, training, and promotion based on national origin.
Department of Labor Launches Project Firewall Investigations
The Department of Labor launched Project Firewall on September 19, 2025, to safeguard rights and job opportunities of highly skilled American workers. Secretary of Labor Lori Chavez-DeRemer will personally certify investigations for the first time in department history when reasonable cause exists that an H-1B employer is not in compliance. As of November 2025, the department had launched 175 investigations. Violations result in back wage recovery, civil money penalties, and debarment from the H-1B program for at least one year.
Recent Settlements Signal Zero Tolerance Approach
The Justice Department obtained a $313,420 settlement with Compunnel Software Group for posting job advertisements that excluded U.S. citizens and permanent residents while favoring H-1B or other temporary visa holders. The settlement included $58,000 in back pay to a U.S. citizen excluded from a Python Developer position and $255,420 in civil penalties. This marked the ninth settlement since the department relaunched its initiative.
What Steps Should Employers Take to Avoid H-1B Discrimination Liability?
Employers must implement comprehensive compliance measures following the h1b visa cognizant verdict and intensified federal oversight. Companies face heightened scrutiny from multiple agencies coordinating enforcement efforts against discriminatory hiring practices.
Audit Recruiting Practices for Citizenship Preferences
Employers are required to offer fair and nondiscriminatory opportunities for employment to U.S. workers. Actions that skew the recruitment process in favor of H-1B nonimmigrants are prohibited. H-1B dependent employers or willful violators must offer jobs to U.S. applicants who are equally or better qualified than H-1B candidates. Companies should review all job advertisements, including those placed by third-party recruiters, to ensure compliance.
Review Statistical Impact of Hiring and Termination Decisions
Adverse impact analysis compares selection rates between protected groups using the four-fifths rule. Employers should conduct these analyzes for hiring, promotions, and terminations to identify patterns triggering liability. Statistical results identify where employers may have risk or vulnerability, requiring investigation of decisions to ensure explanations are job-related and consistent with business necessity. Conducting reviews under attorney-client privilege protects sensitive findings.
Ensure Job Postings Comply with Anti-Discrimination Laws
Job advertisements stating "H-1B preferred" or "H-1B only" violate Title VII's prohibition on discriminatory job advertising based on national origin. Postings must focus on skills and qualifications rather than national origin, birthplace, or immigration category. The Justice Department investigated Compunnel Software Group for using language excluding U.S. citizens while favoring H-1B visa holders, resulting in $313,420 in penalties.
Train HR Teams on National Origin Compliance Requirements
Training should clarify that Title VII protects all national origin groups, including Americans. Stereotypes suggesting workers from certain countries possess superior work ethic are banned. Recruiters and hiring managers need instruction on avoiding unlawful discrimination and maintaining objective, job-related hiring standards.
Document Objective Criteria for All Employment Decisions
Employers should maintain documentation including validation studies, job analyzes, and decision rationales. Documentation persuades third parties to accept the employer's perspective during controversies. Criteria should reflect business necessity, fulfill legitimate business purposes, and avoid disfavoring protected classes.
Conclusion
The Cognizant verdict represents a watershed moment for workplace equality in the technology sector. Undoubtedly, this case exposes how visa sponsorship programs can facilitate systematic discrimination when employers prioritize foreign workers over equally qualified Americans. The statistical evidence—revealing 8.4 times higher termination rates for non-Indian employees—demonstrates the measurable harm such practices inflict on thousands of workers. Federal agencies have responded with coordinated enforcement actions, signaling heightened scrutiny across industries. Employers must immediately audit their hiring practices, review termination patterns, and eliminate policies creating disparate impacts. The message is clear: visa programs cannot serve as vehicles for national origin discrimination, and companies engaging in such practices face substantial legal and financial consequences.
References
[1] – https://www.outsolve.com/blog/adverse-impact-vs-disparate-impact
[2] – https://www.courthousenews.com/cognizant-goes-on-trial-again-over-claims-it-discriminates-against-non-indian-employees/
[3] – https://www.law360.com/cases/59bff482656b3a36ba000002/articles
[4] – https://www.justice.gov/opa/pr/justice-department-fighting-discrimination-against-us-workers
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