For years the H-1B program has been a simmering mix of policies, incentives, and quiet distortions. A new federal ruling has lifted the lid, exposing how that blend has shaped the tech workforce and what happens when the heat finally rises.
While there has been much public debate on the abuses of the H-1B visa since last December, much of it has been just that. We wrote an editorial about a serious proposal from Sen. Jim Banks of Indiana, but we also noted that his American Tech Workforce Act has little chance of becoming law. It has no co-sponsors in the Senate. No GOP senator has publicly supported the legislation.
So, we were drawn this week to a ruling by Chief Judge Dolly M. Gee of the United States District Court for the Central District of California in an H-1 B case.
The plaintiffs in the case are four former employees of Cognizant Technology Solutions, representing a class of about 2,300 former Cognizant employees (non-Indian and non-South Asian workers), who are suing Cognizant for discrimination based on national origin and race.
Judge Gee held that Cognizant's "Visa Readiness," "Visa Utilization," and related policies and practices had a disparate impact on non-South Asian and non-Indian employees, resulting in their disproportionate termination from the "bench" during the Class Period of December 15, 2016, to October 27, 2022.
According to the company's 2023 annual report, Cognizant had a global workforce of 347,700, of which 254,000 were based in India (about 73%). Revenues were $19.4 billion and relied heavily on outsourcing work to the company's India-based development centers.
To this end, the company has been one of the top users of the H-1B visa. According to MyVisajobs.com, Cognizant has filed thousands of petitions with the United States Citizenship and Immigration Services (USCIS) each of the last five years.
- FY 2024: 7,975
- FY 2023: 7,845
- FY 2022: 6,187
- FY 2021: 9,123
- FY 2020: 18,782
The US government grants 85,000 H-1B visas each year. The company was phenomenally successful in its petition strategy, consistently winning 97% or more of its applications.
Here are the total H-1B Approvals (FY 2020–FY 2024). In FY 2020, its win rate was lower, but it won over 17% of all H-1B visas granted that year: just one company dominating the H-1B universe.
- FY 2024: 7,919
- FY 2023: 7,661
- FY 2022: 6,127
- FY 2021: 8,891
- FY 2020: 14,762
According to Duane Morris, a major law firm not directly associated with the case, the conflict centered on Cognizant's "benching" system.
When employees complete a project, and no immediate assignment is available, they're placed on the "bench" to wait for new work. If an employee remains benched for five weeks without being assigned to a new project, Cognizant terminates them.
Specifically, the jury concluded that based on statistical evidence presented at the trial in October 2024, Cognizant favored Indian and South Asian employees by staffing them on new projects, leaving other employees "benched" and subject to termination. This amounted to a pattern or practice of discrimination, as non-Indian and non-South Asian employees were terminated at a much higher rate than the other employees, 8.4 times more terminations.
Cognizant has consistently maintained that it provides equal employment opportunities and has built a diverse and inclusive workplace. The company expressed disappointment with both the jury verdict and subsequent court findings, and has indicated its intention to appeal.
As the Bloomberg Law Review editorialized in September 2024, the legal heart of the case may yet shield Cognizant from severe jeopardy. The company wasn't found to have engaged in "Disparate Treatment," a practice involving intentional discrimination.
However, facially neutral policies could still violate the Civil Rights Act when they produce discriminatory outcomes, even without proof of intentional discrimination. Judge Gee's findings suggest that when visa sponsorship creates workforce demographics that are dramatically skewed (75% South Asian in Cognizant's case versus 12% industry-wide), and when employment decisions disproportionately harm the minority group, companies face legal jeopardy under Title VII of the Civil Rights Act. That is, "Disparate Impact," a term that Judge Gee used in her ruling, could still result in discrimination even if the policies are unintentional.
If the plaintiffs receive a substantial award that survives appeal, Cognizant faces significant financial exposure. With over 2,300 class members, compensatory and punitive damages could reach hundreds of millions of dollars.
Broadly, the case can change the current landscape of large-scale H-1B recruitment from a single country. Companies with heavily skewed H-1B demographics could face increased legal risk. Jeopardy may occur even if company policies appear neutral on their face.
To address the legal risks, companies may begin diversifying their H-1B sponsorship strategies to include more nationalities or reduce overall reliance on H-1Bs by hiring more Americans. Companies may have to extend bench periods for all employees equally; demonstrate that bench termination decisions are truly merit-based and job-related; and monitor and audit bench outcomes by national origin and visa status.
None of the above may occur if the legal process goes Cognizant's way.
The next phase is the judge's determination of compensatory and punitive damages for class members, which is likely to occur next month. Cognizant could convince the judge to award more reasonable damages and agree to pay them without accepting any fault. That would settle the case and end it.
If the award is too high, Cognizant could file an appeal, which, if granted, would be heard by the Ninth Circuit Court of Appeals in San Francisco. If it wins on appeal, its precedential impact will ring across the western United States, home to thousands of tech companies that hire H-1B workers.
However, if Cognizant loses, the impact could extend well beyond the company itself, affecting its business model, its competitors, and the broader technology hiring landscape.
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📊 Market Mood — Thursday, December 11, 2025
🟩 Futures Drift Lower After Fed Cut and Mixed Tech Earnings
U.S. stock futures pulled back early Thursday as investors reassessed the Fed’s third rate cut since September and parsed a wave of tech earnings. Despite a balanced tone from Chair Powell, futures are signaling a softer open: Dow –0.4%, S&P –0.9%, Nasdaq –1.2%. The prior session ended with solid gains, pushing the S&P 500 near record territory.
🟧 Dollar Slips as Markets Price More Cuts in 2026
The dollar index eased to 98.65, touching a seven-week low after Powell said a rate hike is “no one’s base case.” Futures now imply additional cuts in 2026, even as the Fed’s own projections reveal deep internal divisions. Policymakers expect U.S. growth to reaccelerate in 2026, but remain split on how aggressive easing should be in the face of cooling jobs data and elevated inflation.
🟦 Oracle Drops Over 12% on Weak Guidance and Rising AI Spend
Oracle shares plunged in after-hours trading after forecasting slower-than-expected revenue growth (16–18%) and lower EPS guidance than analysts expected. The company also revealed an additional $15B in spending, intensifying concerns that massive AI infrastructure investments may not generate near-term returns. Cloud bookings and Q2 results came in under estimates, erasing much of the momentum from September’s breakout quarter.
🟪 Adobe Beats With Strong AI-Driven Outlook
Adobe offered upbeat annual guidance, projecting revenue of $25.9B–$26.1B and adjusted EPS of $23.30–$23.50, both ahead of expectations. The company highlighted rapid growth in AI-enhanced creative tools, with freemium monthly active users up 35% to over 70 million. While competition for enterprise contracts is intensifying, investors welcomed signs that Adobe’s AI monetization push is gaining traction.
🟫 Trump: CNN Must Be Sold in Any Warner Bros Discovery Deal
In a new twist to the Hollywood bidding war, President Trump said it is “imperative” that CNN be sold as part of any acquisition of Warner Bros Discovery—regardless of whether Paramount’s hostile $77.9B bid or Netflix’s earlier agreement prevails. The comments inject fresh political and regulatory complexity into the already contentious media consolidation saga.
🗓️ Key Economic Events — Thursday, December 11, 2025
🟦 8:30 AM ET — Initial Jobless Claims
A timely read on labor market momentum. Claims have taken on added importance as the Fed weighs signs of cooling employment following its third rate cut since September. A higher-than-expected number would reinforce the narrative of a weakening job market; a lower reading would suggest resilience heading into year-end.
editor-tippinsights@technometrica.com
