Foreign National Employees Settle Wage and Hour and Breach of Contract Claims For $30 Million

A recent $30 million settlement is likely to encourage future class action lawsuits by foreign national workers. In Vedachalam v. Tata America International Corp., et al., a class of foreign national workers sued their employer, Tata Consultancy Services, Ltd., a Mumbai-based staffing company, for breach of contract and wage and hour violations. The plaintiffs alleged that Tata illegally retained the proceeds from their U.S. income tax returns, paid less than the salaries promised in their employment contracts, and required them to forfeit unused vacation days.

In April 2012, six years after the case was initially filed, the District Court for the Northern District of California certified a nationwide a class action of about 12,000 workers to pursue breach of contract claims, and a sub-class of about 6,000 California workers to pursue state wage and hour violations.

In October, after nearly seven years of litigation, the parties engaged in two days of mediation and continued to negotiate the terms of the settlement for two months. In the end, the parties agreed to settle for $30 million. If the settlement is approved by the Court, class members will net an average of $1,600 each.

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