Tata Consultancy’s Bad Rep Bad for Business


Tata Consultancy Services Ltd, a subsidiary of the India-based Tata Group, has gotten itself in a bit trouble now that two former employees are launching a class-action suit against the company. Their motion was finally approved by a U.S court this week.

The background is that these individuals have opened the initial case against TCS all the way back in 2006, citing an alleged failure on behalf of their employer to fulfill the terms of their employment. These are Indian nationalists who were hired for positions in the U.S and were promised two salaries–one adapted to the American economy and another for India.

Their claim is that TCS didn’t provide the latter compensation, and they’re also suing because the company allegedly forced all non-U.S citizen workers into signing an agreement that gives all their tax refunds to the services provider.

Here’s a brief statement from Kelly Dermody, a lawyer working at the firm managing the case:

“More than ten thousand current and former Indian nationals working for Tata in America now may have their day in court. We look forward to demonstrating at trial that Tata breached the standard employment contract with these employees and violated California labour laws.”

Tata Consultancy is officially ranked as the largest software company in India, and outsourced projects in North America accounts for a massive chunk of its revenue. And it may be that the new and revitalized charges are going to take a much bigger toll on its earnings than just a mere probability for a large-scale payoff.

The negative press is soon to follow, and as a services business, a big hit to the company’s reputation is the exact opposite of what TCS needs to promote future client relations.