As reported, this presents itself as a very curious case.
Foreigners working in the United States who claim they were cheated out of their tax refunds have won the right to have their employment dispute heard in American courts, defeating efforts by India's largest conglomerate to force arbitration overseas.
Why would Tata demand its US-based foreign workers 1) sign powers of attorney to allow the company to file their US income taxes for them and 2) sign over their federal and state refunds checks to the company? And then attempt to force the dispute into arbitration IN INDIA?
I know what it sounds like to me.
You will find many of the comments here to be enlightening.
Here's the opinion, courtesy of Atty. Brian Pedigo of Irvine, California.
United States Court of Appeals, Ninth Circuit.
Gopi VEDACHALAM, on behalf of himself and all others similarly situated; Kangana Beri,
Plaintiffs-Appellees,
v.
TATA AMERICA INTERNATIONAL CORPORATION;
Tata Consultancy Services, Ltd., an Indian corporation; Tata Sons, Ltd., an Indian corporation,
Defendants-Appellants.
Gopi Vedachalam, on behalf of himself and all others similarly situated; Kangana Beri, Plaintiffs-
Appellees,
v.
Tata America International Corporation; Tata Consultancy Services, Ltd., an Indian corporation; Tata
Sons, Ltd., an Indian corporation, Defendants-Appellants.
Nos. 07-15504, 08-15521.
Argued and Submitted March 11, 2009.
Filed July 30, 2009.
Kelly M. Dermody, Esquire, Daniel Morris Hutchinson, Lieff Cabraser Heimann & Bernstein,
LLP, James Michael Finberg, Michael Rubin, Altshuler Berzon LLP, Steven M. Tindall, Esquire,
Rukin, Hyland, Doria & Dufrane, LLP, San Francisco, CA, for Plaintiffs-Appellees.
Jon G. Daryanani, Michelle La Mar, Loeb & Loeb LLP, Los Angeles, CA, Kevin J. Smith, Kelley
Drye & Warren LLP, New York, NY, for Defendants- Appellants.
Appeal from the United States District Court for the Northern District of California, Vaughn R. Walker,
Chief District Judge, Presiding. D.C. No. CV-06-00963-VRW. Before THOMAS and BYBEE, Circuit Judges, and BENITEZ FN*, District Judge. FN* The Honorable Roger T. Benitez, United States District Judge for the Southern District of California, sitting by designation.
MEMORANDUM FN**
FN** This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
*1 The parties are familiar with the facts and we do not repeat them here, except as is necessary to explain our decision. Plaintiffs-appellees, Gopi Vedachalam and Kangana Beri, are Indian citizens who were employees of defendants-appellants Tata America International Corporation, et al., an Indian corporation and its affiliates (collectively, “TCS”). Vedachalam and Beri brought suit against the defendants for claims relating to their employment in California, including breach of contract and various violations of the California Labor Code. The defendants appeal the district court's denial of their motion to compel arbitration under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the Convention”) and its ruling that there was no valid agreement to arbitrate the disputes at issue. We affirm.
The district court did not err in finding that the Service Agreements Vedachalam and Beri signed did
not constitute valid agreements to arbitrate the claims alleged in their suit against TCS. The Service
Agreement protects TCS from investing training resources in an employee, only to have that employee
leave; it relates to a training period and related right to exclusive employment in exchange for
training. By its own terms, the Service Agreement's arbitration provision is related only to claims
arising out of a breach of that agreement, which would be claims concerning an employee's failure
to work for TCS for the requisite period, or a surety's failure to pay the penalty. Though under
the Convention we must construe arbitration agreements liberally, and with a predisposition to enforce
them, Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 478-79 (9th Cir.1991), the Service
Agreement arbitration provision does not encompass claims arising from the plaintiffs' employment
in California. Additionally, the other agreements' remedial provisions-which provide different remedies
for different breaches, including the right of TCS to sue its employees-are inconsistent with interpreting
the arbitration provision in the Service Agreement to cover all disputes arising out of the plaintiffs' employment with TCS.
The 2000 letter, which only Vedachalam signed, authorizes two named individuals to be sole arbitrators
“[i]n the context of Tata Consultancy Services deputing [him] abroad and any disputes
arising thereof, ... to hear and resolve the said disputes. ”However, it is not clear that the letter is
even an agreement to arbitrate, rather than a designation of arbitrators for the Service Agreement. In
any event, the letter is not an enforceable arbitration agreement because it lacked consideration by
requiring only Vedachalam, and not TCS, to arbitrate. TCS's argument that a mutual agreement to arbitrate should be inferred is unavailing because the letter contains no mutual commitment to arbitrate
and the other agreements indicate that TCS explicitly reserved the right to litigate in U.S. courts and
collect liquidated damages for disputes arising from employee breaches. In light of TCS's having explicitly
reserved its right to litigate, we will not infer a reciprocal agreement to arbitrate all disputes arising
in the context of Vedachalam's deputation. *2 TCS's argument that its promise of continued
employment constitutes adequate consideration is similarly unconvincing. First, the letter does not
contain any promise of continued employment. Thus, even if such a promise could constitute consideration, it is absent here. Second, while a promise of continued employment may constitute consideration sufficient to support an at-will employee's promise to submit claims to arbitration, see, e.g., Demasse v. ITT Corp., 111 F.3d 730, 734-35 (9th Cir.1997), Vedachalam was not an at-will employee. Accordingly, a promise of continued employment does not constitute sufficient consideration.
AFFIRMED.
C.A.9 (Cal.),2009.
Vedachalam v. Tata America Intern. Corp.
Slip Copy, 2009 WL 2353270 (C.A.9 (Cal.))
