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(Update: A few points on Infosys-Jay Palmer case following the discussions I had with Infosys / industry executives and after listening to a telephonic press conference addressed by Infosys CEO SD Shibulal earlier today.
Infosys was pretty confident about winning the case. Still, the ruling came as a surprise: When Infosys announced its first quarter results in July, a journalist asked Shibulal about Jack Palmer case. CFO V Balakrishnan chose to answer the question - and laced it with his characteristic humor: "We believe we have a strong case. We will defend it. Apart from that we don't want to give a running commentary on that case." In deed, there was no running commentary, but Infosys worked pretty hard on it, collecting facts and building a strong case to defend itself. There was some pressure on the company to settle it outside the court and to settle it fast to save itself from extended bad press. But Infosys decided not to, mainly because to settle outside the court would be seen as an admission of guilt. It felt it had a strong case. That seems to have paid off.
The road ahead for Jack Palmer: Jack Palmer continues to be an employee of Infosys. During the press conference, Shibulal was non-committal while responding to a question on whether Palmer will now be assigned to a project. (He is in 'bench' now). But, in fact, things have become more complicated. Earlier this month, Infosys said a couple of documents submitted by Palmer as evidence were tampered. (Infosys had engaged a third party forensic expert to analyse the documents submitted by Palmer and found deviations from the original) In normal course of events, this would have ensured serious disciplinary action. It's not clear what Infosys plans to do about this. Shibulal only said the company will look at it holistically. Again, according to court ruling, Palmer will have to pay Infosys' legal costs. It's not clear if Infosys would insist on this.
What the case means for Infosys: Infosys could have done well without this case. It was a huge drain on top management time. And it couldn't have come at a worse time for Infosys - IT services market was down; there were leadership changes; it had just kick-started new initiatives under Infosys 3.0 tag. The dust the case kicked up did not show Infosys in good light - Palmer gave a long interview to a television channel in the US, a couple of blogs followed every twist and turn in this case and were not only one-sided but also outright vitriolic towards Infosys. The case led to a government probe on its visa practices, and probably encouraged another employee, Satya Dev Tripuraneni, to file a suit. For Infosys, it's far from over. Still, the dismissal of the case by US judge must have come as a shot in the arm. The market seems to have given a thumbs up. Its share price went up by 2.37% on Tuesday. (Sensex was up by 1.10%))
A federal judge Myron H. Thompson has dismissed Jay Palmer's case against Infosys on Monday saying that his claims did not meet the standard under Alabama law. Palmer claimed he was harassed and sidelined by the company after he reported that Infosys managers was misusing US work visas.
Infosys said in a statement:
Today’s decision confirms what we have been saying from the beginning: Mr. Palmer’s claims of retaliation were completely unfounded. This is a company built on core values that include leadership by example, integrity and transparency. Those values always have and will continue to shape the way we do business with our clients and, without exception, the way we treat our people. We are pleased to consider this matter officially closed.
Kenneth J. Mendelsohn, Jay Palmer's lawyer, said:
While Mr. Palmer and I obviously are disappointed in the results, we certainly respect Judge Thompson’s decision.
It is important for the public to understand that Judge Thompson did not condone Infosys’ conduct. He merely concluded that “under current Alabama law, Palmer has no right to recover from Infosys.”
Judge Thompson noted that the threats against Mr. Palmer were “worrisome” and “deeply troubling.” Judge Thompson even stated that “an argument could be made that such threats against whistleblowers, in particular, should be illegal. The issue before the court, however, is not whether Alabama should make these alleged wrongs actionable, but whether they are, in fact, illegal under state law. This court cannot rewrite state law.”
Most importantly, this decision will have no effect on the ongoing criminal investigations or other claims or charges against Infosys.
Here's a copy of the ruling:
Infy Vs Jay Palmer
More here: Infosys wins harassment case filed by its employee Jay Palmer in US: Economic Times Judge Dismisses Whistle-Blower Suit Against Infosys: New York Times Judge Rules for Infosys in Whistleblower Case: CIO