Despite the ruling, by Alabama District Court Judge Myron Thompson, Infosys' legal troubles aren't over. Its hiring practices continue to be the subject of a probe by federal authorities, and the company is facing another whistleblower lawsuit filed in California earlier this month.
Jack "Jay" Palmer, who remains an Infosys consultant, sued the company in March 2011. He claimed that managers lowered his bonuses, harassed him, and gave him no meaningful work to do after he filed an internal whistleblower complaint about Infosys' hiring patterns.
Palmer said he also received anonymous threats at work and at home, and that as a result he now carries a gun.
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Palmer claimed that Infosys was routinely and illegally importing full-time staff to the U.S. from India under so-called B-1 visas that are only meant for short-term work assignments.
In dismissing the suit, Thompson ruled that Alabama law gives companies the right to fire or demote workers for almost any reason, unless they have a formal contract--which Palmer lacked. In Alabama, a worker "may be discharged for any reason, good or bad, or even for no reason at all," Thompson wrote in his opinion.
The ruling addressed the allegations of visa fraud only in as much as the judge appeared to agree with much of Palmer's evidence. But he found that, even if true, it had no bearing on the case. "It is against this backdrop of Alabama law, like it or not, that the court considers Palmer's claims," Thompson wrote.
In a footnote to his ruling, Thompson stressed that "this litigation does not concern whether Infosys violated American immigration law." He also noted in the main text of his opinion that "Infosys is currently under investigation by the Department of Homeland Security and a federal grand jury."
In an SEC filing, Infosys confirmed that on May 23, 2011, it received a grand jury subpoena from the U.S. District Court in Eastern Texas, seeking "documents and records related to the Company's sponsorships for, and uses of, B-1 business visas."
In a statement Monday, Infosys said that Thompson's ruling "confirms what we have been saying from the beginning: Mr. Palmer's claims of retaliation were completely unfounded. This is a company built on core values that include leadership by example, integrity, and transparency."
Meanwhile, Infosys faces another whistleblower suit similar to Palmer's. This one, in U.S. District Court in California, was filed August 2 by former accounts manager Satya Dev Tripuraneni.
Tripuraneni claims that, while working in Infosys offices in Fremont in 2011, he was asked to prepare paperwork that would allow the company to fraudulently bring workers into the country on B-1 visas while billing clients--including, and with the approval of, Cisco--for offshore workers.
"As a law abiding citizen, Mr. Tripuraneni blew the whistle--hard. He spoke out to Infosys management and informed the U.S. Department of Homeland Security," Tripuraneni's attorneys state in court papers. "But instead of rewarding Tripuraneni, Infosys initiated a full throated campaign of retaliation."
Infosys has yet to formally respond to Tripuraneni's allegations.