For employers facing class actions alleging discriminatory hiring practices, this ruling provides an excellent roadmap to defend such cases, especially when hiring decisions are made by a large number of managers across a vast geographic area.
Factual Background
Defendants were an Indian consulting and information technology company, with their headquarters in Noida,
Plaintiffs filed a lawsuit against Defendants on
Plaintiffs moved for class certification, seeking to represent a class comprised of, "[a]ll individuals who are not of South Asian race, or Indian national origin, or visa holders who applied for positions with (or within) HCL in the
The Court's Decision
The Court denied Plaintiffs' motion for class certification. First, the Court held that Plaintiffs satisfied numerosity under Rule 23(a)(1) since Plaintiffs alleged that the putative class would have roughly 43,000 members. Id. at *8. Defendants did not dispute that Plaintiffs' putative class was sufficiently numerous under Rule 23(a)(1).
Most significantly, however, the Court held that Plaintiffs failed to establish commonality under Rule 23(a)(2). Id. at *9. Citing
The Court rejected Plaintiffs' arguments and held that they did not establish commonality, "for at least seven reasons." Id. at *11. Some of those reasons included: (1) over 1,000 job requests during the proposed class period explicitly excluded visa holders from consideration, including some that were required by law to be filled with a citizen or green card holder; (2) for roughly 50% of job requests, HCL did not fill an open position with any candidate because either the client withdrew the job request, the client filled the job request with its own direct applicant, or the position was filled by a competitor; (3) there were reasons that job candidates were not hired that are independent of Defendants' alleged discriminatory hiring practices; (4) Plaintiffs failed to provide the requisite "glue" because Defendants' hiring processes took different forms for job candidates depending on the positions for which they applied and the different hiring managers involved; (5) Defendants utilized roughly 1,800 different hiring managers across the country, each of whom was empowered with discretion to make staffing and hiring decisions; (6) employment decisions took place in 47 states, involved roughly 16,000 job searches, and concerned approximately 200 job types; and (7) Plaintiffs failed to establish that Defendants' employment policies and procedures constrain discretion or follow a "common direction" from HCL's management. Id. at *11-15. Accordingly, the Court held that Plaintiffs failed to establish commonality under Rule 23(a)(2).
The Court also opined that Plaintiffs failed to establish typicality under Rule 23(a)(3). One named Plaintiff worked in sales since 2003, had experience with the outsourcing services offered by HCL, and unsuccessfully applied to work at HCL five times between 2017 and 2018. The second named Plaintiff was an engineering professional with 35 years of experience, who unsuccessfully applied to work at HCL on four occasions between 2018 and 2019. The Court held that the named Plaintiffs failed to establish that they were injured by the same conduct that injured other class members. Id. at *17 (citations omitted). Accordingly, the Court held that because Plaintiffs have failed to satisfy the requirements Rule 23(a)(3).
The Court further concluded that Plaintiffs failed to establish predominance under Rule 23(b)(3). Id. at *18. The Court determined that the unique experiences of the two named Plaintiffs alone exemplified the need for individual inquiries, which would predominate over common questions of law or fact to the putative class. Id. at *18-19. The Court further noted that many putative class members were evaluated by an HCL client as part of the hiring process, and the candidate's adverse employment decision may be attributable to a client's feedback. Accordingly, the Court held that individual inquiries will predominate over common questions of law or fact to the putative class. Id. at *19-20.
Finally, the Court ruled that Plaintiffs failed to satisfy the requirements of Rule 23(c)(4), which provides that, "when appropriate, an action may be brought or maintained as a class action with respect to particular issues." Id. at *20 (citing Fed.
In sum, the Court denied Plaintiffs' motion for class certification, holding they failed to satisfy the requirements of Rules 23(a)(2), 23(a)(3), and 23(b)(3) with respect to their putative class, and that Plaintiffs likewise failed to satisfy the requirements of Rule 23(c)(4). Id. at *21-22.
Implications For Employers
The decision in Handloser v.
Second, the facts in Handloser involved an emerging trend of reverse discrimination lawsuits. Some businesses, especially in the technology sector, have been confronted with similar lawsuits alleging that visa-holders from foreign countries are given preferential treatment in hiring situations over
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