Recruitment Firm's H-1B Visa Appeal Dismissed

July 17, 2001 ( - The dismissal of a recruitment firm's appeal by a San Francisco court means that the firm must delete some of the small print from contracts with foreigners with H-1B visas.

Since the appeal was rejected because the company missed a filing deadline, the case does not provide official legal precedent for other H-1B visa holders suing their employers and former employers, but does provide them with some hope.

Small Print

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In the initial trial, brought by Indian computer programmer Dipen Joshi, against Compubahn, which places foreign professionals in contract jobs in the US, the judge ruled that the company could not include restrictive, non-compete clauses in its employment contracts.

The clauses in question prohibited programmers from working directly for a corporate client or meeting clients to discuss the possibility of doing so for a year after leaving Compubahn.

Joshi’s attorney, Michael Papuc, believes the case could still influence other decisions since lawyers in similar cases can now ask judges to take judicial notice of the case, thereby giving it persuasive authority.

H-1B Boom

The Internet boom increased the popularity of the H-1B visa program, spawning a plethora of recruitment firms that specialize in finding and placing foreign IT workers at US companies. These recruiters often require workers to sign restrictive contracts, which, in some cases, violate US labor laws.

The recruiters often take a cut of the worker’s salary and sometimes impose hefty finder’s fees and harsh penalties if workers quit. Since these workers usually lack knowledge of the US legal system, few question the contracts or sue their employers.

The Department of Labor (DoL) has tried to investigate these companies, but argues that it doesn’t have the manpower to enforce labor laws.

Waiting for a Decision

Joshi still awaits an appeals decision on another crucial aspect of the case. Earlier in the year, a judge ordered Compubahn to pay Joshi $215,050.61 in legal fees and other expenses. The company appealed the decision and it is still under consideration.

– Camilla Klein