Govindharajan v. Tata Consultancy Services

Background

Vinod Govindharajan brought a proposed class action against Tata Consultancy Services, Ltd. (TCS) and Rajesh Gopinathan. He asserted six claims involving alleged unequal pay and retaliation under the New Jersey Conscientious Employee Protection Act, Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, and the New Jersey Law Against Discrimination. He also asserted a claim under 18 U.S.C. § 1546 based on alleged visa fraud.

Govindharajan began working for TCS in India in 2010 and began an assignment in New York and New Jersey in December 2013. Before relocating, he signed a Deputation Agreement containing a dispute-resolution provision. That provision required disputes concerning the deputation or compensation to be submitted to binding arbitration under India’s Arbitration and Conciliation Act and the rules of the Nani Palkivala Arbitration Centre. It specified Chennai, India, as the arbitration venue. The agreement separately stated that it was governed by Indian law.

Govindharajan alleged that he raised concerns about receiving less pay than United States-based coworkers, later learned that TCS had mischaracterized his position on his visa application, and suffered retaliation. He alleged that TCS demoted him, conditioned Green Card sponsorship on his promise not to complain to government agencies, and later withdrew his visa-extension petition. He and his family returned to India in February 2019. He filed the federal case on October 29, 2019. Although he initially filed without a lawyer, he had counsel before the defendants filed the motion at issue.

Motion to Compel Arbitration

The court held that the arbitration agreement covered the claims brought under the New Jersey Conscientious Employee Protection Act, Title VII, the Equal Pay Act, and the New Jersey Law Against Discrimination. Govindharajan did not dispute that he signed the agreement or that it contained an arbitration provision. Instead, he argued that the provision was ambiguous and did not cover all of his claims.

The court interpreted “deputation” broadly enough to include Govindharajan’s long-term United States assignment and employment-related functions. It concluded that the alleged retaliation occurred during that deputation. The court also concluded that the agreement’s definition of “compensation” covered the pay at issue in the equal-pay claims.

Govindharajan also argued that the arbitration provision was procedurally and substantively unconscionable. Procedural unconscionability concerns whether a party lacked a meaningful choice when signing; substantive unconscionability concerns whether contract terms were unreasonably favorable to one side. The court rejected both arguments. It found that the take-it-or-leave-it presentation, alleged financial pressure, and other circumstances did not establish procedural unconscionability. It also found that Govindharajan had not shown that arbitration in India under the Nani Palkivala Arbitration Centre’s rules would deprive him of any remedy or create an unfairly one-sided process.

The court noted that the parties’ briefs assumed New York law governed enforceability of the arbitration provision, even though the agreement selected Indian law generally. Applying the Federal Arbitration Act, the court found a valid arbitration obligation and concluded that Govindharajan had refused to arbitrate by filing the lawsuit. The court therefore granted the defendants’ motion to compel arbitration of the claims under the New Jersey Conscientious Employee Protection Act, Title VII, the Equal Pay Act, and the New Jersey Law Against Discrimination.

Visa-Fraud Claim

The court dismissed Count VII, Govindharajan’s claim under 18 U.S.C. § 1546. The court held that this is a criminal statute and does not create a private right of action—that is, it does not authorize an individual to bring a civil lawsuit under the statute. The court therefore dismissed the visa-fraud claim under Rule 12(b)(6), which addresses whether a complaint states a legally sufficient claim.

Stay and Disposition

The defendants asked that the remaining claims be dismissed if Govindharajan did not request a stay while arbitration proceeded. The court explained that a stay is required when a party requests one after the court determines that the claims must be arbitrated, but that a stay is not mandatory when no party requests it. The court delayed dismissal for ten days and directed Govindharajan to notify the court by July 26, 2020, whether he sought a stay.

Judge Ronnie Abrams’s stated disposition was to compel arbitration of the claims under the New Jersey Conscientious Employee Protection Act, Title VII, the Equal Pay Act, and the New Jersey Law Against Discrimination, and to dismiss the claim under 18 U.S.C. § 1546. The opinion did not itself state that the remaining claims were dismissed; it gave Govindharajan the opportunity to request a stay before deciding whether to dismiss the action.