SAN FRANCISCO — In what his lawyer is calling one of the first class action lawsuits against a company engaged in "reverse outsourcing," Gopi Vedachalam, an employee of Tata America International Corp., is suing his employer and its parent corporations Tata Consultancy Services Ltd. and Tata Sons Ltd., for requiring all of its non-U.S.-citizen employees to endorse and sign over their federal and state tax refund checks to Tata.

Tata is one of India's largest business conglomerates, with revenues last year of over $17 billion.  

"As far as we can tell, there is not a legal basis to do this," said Steven M. Tindall, who is representing Vedachalam in the case. Tindall is a partner with Lieff Cabraser Heimann & Bernstein LLP, which is headquartered in San Francisco.

According to Tindall, up until July 2005, Tata America would file state and federal tax returns for its non-U.S. citizen employees. The company would then send the refund checks to employees, he said, for their signatures with instructions that the checks be returned to the company.

In the complaint filed February 14 in the U.S. District Court of the Northern District of California, it states "In 2004, for example, [Tata Consultancy Services] sent Vedachalam an "Urgent Memo" that stated: Thank you very much for your excellent support in assisting us to file the tax return on your behalf for the year [current year]. We are now forwarding you the tax refund check received from the Tax Authority. Please sign on the reverse of the cheque and return it to the below mentioned address. Your assistance in the [sic] regard will be highly appreciated."

Tata would keep the money, said Tindall. "Tata is the reason [these employees] are in the United States," said Tindall. "We are not saying they are making threats of sending anyone back but they say you are required to do this. There are a lot of implications when you get a memo from an employer [that says] you must do this."

Tata employees in the United States who are not U.S. citizens are granted visas, which allow them to work and live in the country. According to the complaint, Tata requires each employee to sign an agreement, which states that the employee's gross amount of compensation will be includable as earnings in the United States and reported to the U.S. Internal Revenue Service. The complaint alleges that these employees are not paid the amount promised them in these agreements.

Michael V. McCabe director of communications for Tata America International Corp. said that the company has been legally advised that "we have complied with all applicable U.S. federal and state laws."

The company has not been officially served with any papers yet, said McCabe — a fact confirmed by Tindall who said that he anticipates they will be served "with papers shortly."

"We can't comment on a situation that hasn't happened yet," said McCabe. "Obviously we take this seriously and we will fight vigorously in legal proceedings when we are formally served."

According to McCabe, Tata employs about 9,500 people in the United States. He said the company did not have information on how many of those employees were not United States citizens.

 The complaint charges that most Tata employees in the United States are non-U.S. citizens. Tindall put the number somewhere around 5,000 but he said it was a very rough estimate.

Tindall said that the tax refund checks owed to Vedachalam total about $250,000 over the six years that he was employed by Tata in the United States. "We are not saying that all employees got [are owed] that but many employees are in a similar [situation]. It's a lot of money."

Tindall said he petitioned the court for a class action designation, a process that he said could take up to a year. If the case is brought as a class action suit, all employees who join the suit are entitled to a piece of the settlement. The proposed class consists of thousands of current non-U.S. citizen employees of Tata working in the United States, plus former Tata employees dating back to 2000.

Tindall said since he sent out a press release about the suit, he's been contacted by "dozens of employees saying the same thing happened to me. I'm confident that there are others."

Vedachalam, 37, is originally from Mumbai and worked for Tata in India for three years before he came to the United States in 2000. For three years, he worked as a Tata project manager assigned to Target in Hayward, Calif. Since 2003, he has worked as a Tata project manager for 21st Century Insurance in Woodland Hills, Calif.

"I work hard for Tata and the companies I have been assigned to," said Vedachalam in a statement. "I should receive the full wages Tata agreed to pay me, as should all other Tata employees in America.  I did not hand over my tax refund checks voluntarily. I tried to recover these wages through Tata's internal procedures, but I was met with either silence or refusal."

Tindall said that Vedachalam made the initial contact with his firm. "He approached us," said Tindall. "He's not interested in relief on behalf of himself. He's looking to right the wrong of Tata taking non-U.S. citizen employee's [tax] refunds."

Tindall said that so far he has had no communication with Tata. But he said that he believes that the practice of taking the refund checks has stopped. The company, he said, sent out a memo, which stated that non-U.S.-citizen employees would be doing their own taxes from now on.

"Gopi is a regular guy," said Tindall. "He works very hard. He is like thousands of other people working for Tata. He wants to see justice done."