Foreign Tech Worker Wins Victory in H-1B Visa Case

In a legal victory for hundreds of thousands of foreign high-tech workers in the United States on H-1B visas, an Indian computer programmer has successfully sued his Silicon Valley recruitment firm to escape a work contract that levied steep fines for leaving early.

Dipen Joshi left Gujarat, India, in March 1998 to work on a H-1B visa for California-based recruitment firm Compubahn, where he signed a contract requiring him to remain with the firm for 18 months or pay stiff penalties.

When he tried to leave for a full-time job at Oracle Corp. before his contract ended, the recruitment firm handed him a bill for $77,000 in fees and penalties.

Joshi sued in San Mateo County Superior Court, where Judge Phrasel Shelton ruled Joshi’s contract was “void and unenforceable” because it violated state unfair competition statues.

Shelton also struck down conditions on all similar Compubahn contracts that required such things as “finders fees,” or levied fines for leaving early. The judge ordered Compubahn to pay Joshi $215,000 in legal fees and other expenses.

The ruling, which affects about 38 Compubahn contracts, could set off a flood of similar lawsuits, said Joshi’s lawyer, Michael Papuc.

About half of the H-1B visa holders work directly for major technology firms such as Oracle or Sun Microsystems Inc. but the rest end up at recruitment firms under restrictive contracts--making it likely Joshi’s legal win will spark similar lawsuits, he said.

Compubahn spokesman Michael Turpel disagreed with the judge’s ruling, saying the issue was about interfering with business operations, rather than stifling competition. He said the firm may appeal.