Franchitti v. Cognizant Tech. Solutions Corp.

555 F.Supp.3d 63

Jean-Claude FRANCHITTI, Plaintiff,

v.COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION et al., Defendants.

Civil Action No. 3:17-cv-06317

United States District Court, D. New Jersey.

Filed August 17, 2021

Jonathan Rudnick, The Law Offices of Jonathan Rudnick LLC, Tinton Falls, NJ, for Plaintiff.

Stephanie Lynn Silvano, Gibson Dunn & Crutcher LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER

PETER G. SHERIDAN, U.S.D.J.

This case is before the Court on Defendant's motion to dismiss Plaintiff's amended qui tam complaint. (ECF No. 18). The Court heard oral argument on July 20, 2021. For the reasons that follow, Defendant's motion is granted in part and denied in part.

BACKGROUND

A. Facts

Plaintiff Jean-Claude Franchitti ("Plaintiff" or "Franchitti") is a former employee of Defendants Cognizant Technology Solutions Corporation and Cognizant Technology Solutions U.S. Corporation¹ ("Defendant" or "Cognizant"). Cognizant provides technology services to its corporate clients on an individual project basis, as many of its clients do not have in-house IT departments. (Am. Compl. ¶ 15).

Many of Cognizant's employees are foreign workers, for whom Cognizant must apply for visas when they travel to the United States to work on projects. (Id. ¶¶ 18-19). The three primary types of visas Cognizant secures for its foreign workers are H-1B, L-1, and B-1. (Id. ¶ 19). Because the distinctions between those visas are at the heart of this case, a brief description of each follows.

i. H-1B Visas

H-1B visas are intended for temporary, specialized labor. 8 C.F.R. § 214.2(h)(1). When an employer applies for an H-1B visa, it must state, inter alia , the place, start date, and end date of the worker's employment. 20 C.F.R. § 655.730(c)(4). The employment must be non-speculative – that is, the position must exist at the time the application is filed – and the foreign worker's wages must be the same as other workers performing the same or similar duties in the marketplace. 20 C.F.R. § 655.731(a) ; USCIS, Policy Mem. 3 (2020), https://www.uscis.gov/sites/default/files/document/memos/PM-602-0114_ITServeMemo.pdf; Combatting Fraud and Abuse in the H-1B Visa Program , USCIS, https://www.uscis.gov/scams-fraud-and-misconduct/report-fraud/combating-fraud-and-abuse-in-the-h-1b-visa-program (last visited June 22, 2021); (see also ECF No. 17-26 (collecting cases)). An H-1B visa recipient may work in the United States for up to three years, with an option to extend the work authorization for another three years. H-1B Specialty Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models , USCIS, https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion (last visited June 22, 2021).

The United States awards 65,000 H-1B visas (plus 20,000 for applicants with at least a master's degree) through a highly competitive lottery system each year.² Id. Generally, the selection process begins in March and, if selected in the lottery, an H-1B visa recipient may start working in the United States in October of the same year. H-1B Electronic Registration Process , USCIS, https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations-and-fashion-models/h-1b-electronic-registration-process (last visited June 22, 2021). While the cost of an H-1B application may vary depending on the type of employer, it would likely be about $6,460 for a large company with many foreign workers like Cognizant. See H and L Filing Fees for Form I-129, Petition for a Nonimmigrant Worker , USCIS, https://www.uscis.gov/forms/all-forms/h-and-l-filing-fees-for-form-i-129-petition-for-a-nonimmigrant-worker (last visited June 22, 2021); I-129, Petition for a Nonimmigrant Worker , USCIS, https://www.uscis.gov/i-129 (last visited June 22, 2021); (see also Am. Compl. ¶ 25).

ii. L-1 Visas

L-1 visas are intended for applicants who have worked for their employer abroad for at least one continuous year within the preceding three years, and will provide services to the same employer in the United States in a capacity that is managerial, executive, or involves specialized knowledge or expertise in the employer's operations. 8 C.F.R. § 214.2(l)(1). Recipients of an L-1A or L-1B visa may work in the United States for a maximum of seven or five years, respectively, after extending the initial three-year period. L-1A Intracompany Transferee Executive or Manager , USCIS, https://www.uscis.gov/working-in-the-united-states/temporary-workers/l-1a-intracompany-transferee-executive-or-manager (last visited June 22, 2021); L-1B Intracompany Transferee Executive or Manager , USCIS, https://www.uscis.gov/working-in-the-united-states/temporary-workers/l-1b-intracompany-transferee-specialized-knowledge (last visited June 22, 2021). Unlike H-1B visas, L-1 visas do not have an annual cap, lottery system, or wage requirement. Id. Further, an employer like Cognizant would likely pay $5,460 per L-1 visa application. See H and L Filing Fees for Form I-129, Petition for a Nonimmigrant Worker , USCIS, https://www.uscis.gov/forms/all-forms/h-and-l-filing-fees-for-form-i-129-petition-for-a-nonimmigrant-worker (last visited June 22, 2021); I-129, Petition for a Nonimmigrant Worker , USCIS, https://www.uscis.gov/i-129 (last visited June 22, 2021); (see also Am. Compl. ¶ 28).

iii. B-1 Visas

B-1 visas are intended for short-term visitors for business purposes, which can include attending a conference, consulting with business associates, negotiating a contract, and participating in short-term trainings. 8 C.F.R. § 214.2(b) ; B-1 Temporary Business Visitor , USCIS, https://www.uscis.gov/working-in-the-united-states/temporary-visitors-for-business/b-1-temporary-business-visitor (last visited June 22, 2021). A visitor on a B-1 visa may stay in the United States for up to six months, with the possibility of extending the stay for a maximum total of one year per trip. Id. Unlike recipients of L-1 and H-1B visas, a visitor on a B-1 visa is not authorized to work in the United States. See 8 C.F.R. § 214.2(b) ; Visitor Visa , U.S. Dep't of State, https://travel.state.gov/content/travel/en/us-visas/tourism-visit/visitor.html (last visited June 22, 2021). A B-1 visa application costs $160 and does not involve a lottery process. U.S. Dep't of State, supra.

Cognizant hired Franchitti as a Director in 2007 and promoted him to Assistant Vice President in 2011. (Am. Compl. ¶ 32). Franchitti alleges that, during the course of his employment, he observed several types of fraud in Cognizant's visa application procedures.

First, he alleges that Cognizant routinely applied for H-1B visas for future, prospective work. This allowed it to maintain a population of "travel ready" workers who could immediately travel to the United States when a labor need arose, thereby circumventing the unreliable, competitive, and time-consuming H-1B lottery process. (Id. ¶¶ 39-40). To secure these prospective H-1B visas, Cognizant allegedly falsified job descriptions and projects in invitation letters which described the work that the "travel-ready" employees would perform in the United States. (Id. ¶ 45). Franchitti cites email correspondence and internal documents regarding this practice, in which he was pressured to participate. (Id. ¶¶ 40-43; see, e.g. , ECF Nos. 17-4, 17-9, 17-11, 17-12, 17-16). For example, he was asked to explain to team members Cognizant's need "to get associates visa-ready, so if a suitable opportunity arises in the US we can move quickly," (Am. Compl. ¶ 41), and to sign hundreds of fraudulent invitation letters, (id. ¶¶ 46-47). When Franchitti raised concerns about these practices with his supervisor, the responsibility to sign invitation letters was transferred to another Cognizant employee. (Id. ¶ 50).

Second, Franchitti alleges that Cognizant routinely applied for L-1 and B-1 visas instead of H-1B visas to save money and avoid the H-1B lottery process. (Id. ¶¶ 52-53).

For its L-1 visa applications, Cognizant allegedly issued fraudulent invitation letters attesting to the managerial and/or specialized duties the visa recipients would perform – much of which was fabricated. (Id. ¶ 54). Franchitti alleges Cognizant's fraud was two-fold: (1) it improperly secured L-1 visas for future projects, and (2) the work the employees actually performed did not meet the criteria for an L-1 visa. (Id. ¶¶ 53-55).

In addition, Cognizant allegedly brought foreign workers to the United States on B-1 visas to perform billable work that required an H-1B visa. (Id. ¶ 56). Franchitti cites internal correspondence indicating that Cognizant knowingly approved B-1 visa holders to perform paid services in the United States, even though the B-1 visa does not authorize such work. (Id. ¶ 57).

Third, Franchitti alleges that Cognizant falsely certified that it would pay its H-1B employees the legally required wage rate when, in fact, it paid those employees substantially less than their colleagues who performed the same work but did not require visas. (Id. ¶ 58). He asserts that keeping its employee expenses low allowed Cognizant to offer its customers a lower price and make more profit. (Id. ¶¶ 59-60).

In sum, Franchitti argues the United States has been harmed by Cognizant's fraudulent practices because (1) it has been deprived of its interest in the visas and the ability to control their distribution in accordance with the law; (2) it was deprived of application fees when Cognizant improperly applied for L-1 and B-1 visas for work that required a more expensive H-1B visa; and (3) Cognizant's underpayment of its H-1B visa workers has deprived the United States of significant tax revenue by reducing the required amount of its payroll tax contributions.³ (Id. ¶¶ 63-65). Each of those harms, he alleges, arose from Cognizant's submission of false certifications and false claims during the visa application...