A federal judge has issued a significant new ruling against Cognizant Technology Solutions, determining that several of the company’s long-standing workforce policies disproportionately affected employees who are neither South Asian nor Indian.
This ruling marks another setback in an eight-year discrimination case that has become one of the most closely monitored legal battles in the tech industry.
Chief U.S. District Judge Dolly Gee ruled on December 5 that Cognizant’s “Visa Readiness,” “Visa Utilization,” and related staffing practices had a discriminatory disparate impact on U.S. workers during the class period of 2016–2022.
The court found the policies, which prioritized large pools of H-1B visa holders, overwhelmingly Indian nationals, resulted in the disproportionate termination of non-South Asian and non-Indian employees placed on the company’s internal “bench.”
The ruling follows an earlier October 2024 jury verdict that found Cognizant intentionally discriminated against the same group, awarding punitive damages, per the legal blog of Duane Morris.
Plaintiffs had argued that Cognizant effectively engineered a workforce dominated by Indian H-1B holders and used its bench-termination system to push out American workers at far higher rates.
Judge Gee cited statistical evidence showing:
- Non-South Asians were 7x more likely to face involuntary termination overall.
- Non-South Asian and non-Indian workers were 8.4x more likely to be terminated from the bench.
- Disparities reached 96 standard deviations — making the likelihood of random chance “less than one in a billion.”
- Non-Visa employees had a 30% termination rate from the bench, compared with 3% for visa holders, who were 99% Indian-origin.
The court rejected Cognizant’s business-necessity defense, pointing to the company’s heavy reliance on projected H-1B labor. Through “Visa Readiness,” Cognizant routinely applied for excess H-1 B visas to build a pipeline of “travel-ready” workers before actual U.S. job openings existed.
Related “Visa Utilization” policies, including rotation rules, “operational excellence” initiatives, and visa-chargeback systems, further incentivized managers to staff visa holders first.
Roughly 88% of Cognizant’s U.S. workforce during the class period were South Asian.
The class includes more than 2,000 employees terminated from the bench between 2013 and 2022. Phase Two of the case, which will determine individualized remedies such as back pay or reinstatement, is set to move forward in early 2026.
The ruling marks another major defeat for one of the country’s most prolific users of the H-1B program.
Cognizant held more than 3,000 active H-1B visas in Texas alone as of March 2025, according to federal data previously reported by The Dallas Express.
A Cognizant spokesman previously issued a statement on the case at the time of the 2024 ruling:
“Cognizant is disappointed with the verdict and plans to vigorously defend itself and appeal at the appropriate time. We provide equal employment opportunities for all employees and have built a diverse and inclusive workplace that promotes a culture of belonging in which all employees feel valued, are engaged and have the opportunity to develop and succeed. Cognizant does not tolerate discrimination and takes such claims seriously.”
This disparate impact ruling came just days before leaders at the Department of Justice announced a policy change in how the agency would handle those cases.
“The prior ‘disparate impact’ regulations encouraged people to file lawsuits challenging racially neutral policies, without evidence of intentional discrimination,” Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division said in a press release.
“Our rejection of this theory will restore true equality under the law by requiring proof of actual discrimination, rather than enforcing race- or sex-based quotas or assumptions.”