Handloser v. HCL America, Inc.

Background

Gregory Handloser and Cerafin Castillo sued HCL Technologies Ltd. and HCL America, Inc. under Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1866. Their Second Amended Complaint alleged three claims: race- and citizenship-based disparate treatment under 42 U.S.C. § 1981, race- and national-origin-based disparate treatment under Title VII, and race- and national-origin-based disparate impact under Title VII.

The plaintiffs sought to represent a class of U.S. citizens who were not of South Asian race or Indian national origin, sought positions with HCL in the United States at Career Level 3 or above between March 7, 2015, and the date of certification, and were not offered employment. They alleged that HCL prioritized visa-ready Indian candidates and used “culture fit” interviews to screen out non-Indian local candidates. They relied in part on statistical evidence concerning HCL’s hiring patterns.

Class-certification standard

Under Federal Rule of Civil Procedure 23, a party seeking class certification must show numerosity, commonality, typicality, and adequate representation under Rule 23(a), as well as satisfy at least one provision of Rule 23(b). For a damages class under Rule 23(b)(3), common questions must predominate over individual questions, and a class action must be superior to other methods of resolving the dispute. Rule 23(c)(4) can permit class treatment of particular issues, but the proposed class must still satisfy the applicable Rule 23 requirements.

Court’s analysis

The court held that the plaintiffs established numerosity. The plaintiffs estimated that the proposed class would contain roughly 43,000 people, and HCL did not dispute that the class was sufficiently numerous.

The court held that the plaintiffs failed to establish commonality. It gave several reasons. First, more than 1,000 job requests expressly excluded visa holders, so applicants for those positions could not have been harmed by a policy favoring visa-ready Indian candidates. Second, HCL did not fill roughly half of the job requests because clients withdrew them, filled them with direct applicants, or used an HCL competitor. Third, for approximately two-thirds of the job requests, HCL clients interviewed candidates and provided feedback, and sometimes could reject candidates themselves. These circumstances meant that the reasons for applicants’ adverse employment decisions varied and could not be answered through one classwide determination.

The court also found that HCL used different hiring procedures for delivery, sales, and enabling positions. Delivery candidates generally went through recruiter and technical interviews and often a client interview. Sales candidates generally interviewed with human resources, while enabling candidates received a human-resources interview only for leadership positions. The court found no evidence that the alleged “culture fit” interviews applied across the proposed class. It further noted that about 1,800 hiring managers exercised discretion across 47 states and approximately 200 job types, without evidence of a companywide direction that constrained that discretion.

The court held that the plaintiffs failed to establish typicality. Castillo’s applications involved HCL’s client, the University of California, San Francisco, and at least one position that excluded visa holders. On another application, that client interviewed and rejected Castillo. The court therefore concluded that his adverse decision was attributable to the client’s actions rather than HCL’s alleged discriminatory practices. Handloser also applied for a position that excluded visa holders and applied for sales positions, while most proposed class members would have applied for delivery positions. The court found that these differences made the named plaintiffs’ alleged injuries atypical of the proposed class.

The court separately held that the plaintiffs failed to establish predominance for a Rule 23(b)(3) class. Individual inquiries would be needed to determine whether a position excluded visa holders, whether an HCL client evaluated or rejected an applicant, whether the position was withdrawn or filled by someone other than HCL, and whether an applicant experienced an alleged “culture fit” interview. The court found that these individual issues would outweigh common questions.

The court also denied certification of a Rule 23(c)(4) class for particular issues. It held that the plaintiffs had not met the commonality and typicality requirements, and that their brief argument for issue certification was too vague to justify class treatment.

Other motions and disposition

The court denied HCL’s motion to file a sur-reply. It stated that the result would be the same with or without the challenged material and that, in any event, considering the material was appropriate because it responded directly to issues raised in HCL’s opposition. The court found the plaintiffs’ request to appoint Kotchen & Low LLP as class counsel moot because it denied class certification.

The court denied the plaintiffs’ motion for class certification. It did not reach HCL’s other stated grounds for opposing certification because the plaintiffs’ failure to establish commonality, typicality, and predominance was sufficient to require denial.