Infosys labor lawsuit over overtime pay

Dept of Labor should not find it hard to litigate against Infosys, now that Promila Awasthi has opened a can of works. Time for Infosys managers to take training in US labor laws, business ethics, cultural sensitivity and common-sense. I wonder how much will they settle for this time. The last employee to successfully sue Infosys walked away with a handsome settlement. This case is now going to cast wide aspersions on every Indian manager. If these morons do not know how to do business in the US, they need to get their asses fired. Any local Silicon Valley employees know who was Promila Awasthi's manager ?

NBCBayarea news reports.

Who says you can't celebrate Thanksgiving?

Promila Awasthi, a Silicon Valley computer consultant, says her bosses at Infosys did.

In a lawsuit filed Monday in Alameda County Superior Court, Awasthi, an India-born American citizen, says her bosses at Infosys's Fremont ,Calif. office mocked her for observing American holidays like Thanksgiving and Christmas and refused to pay her overtime according to California law.

The lawsuit is potentially explosive for Infosys, one of a host of India-based information-technology outsourcing firms which take over computing tasks from other companies.

Infosys has been pushing to expand its presence in the United States, both to blunt the political backlash from moving jobs overseas and to gain a commercial advantage by hiring local sales and marketing executives better equipped to take business from the slick sales forces of HP and IBM.

Contrast Infosys's global ambitions with the allegations in Awasthi's lawsuit. She hardly paints a culturally sensitive picture of her former company, where she worked from February to November 2008, at which point she claims "intolerable" working conditions forced her to quit. Here are highlights from the lawsuit:

Infosys management routinely disparaged Americans, including Mrs. Awasthi, as not having "family values," and stated that layoffs in America are good because the jobs will be outsourced.

Infosys management ridiculed Mrs. Awasthi for celebrating the American holiday of Thanksgiving, telling her that she should not celebrate Thanksgiving because she is Indian, and that therefore she must work on Thanksgiving Day.

Infosys management ridiculed Mrs. Awasthi’s children for celebrating Thanksgiving, and called them "ABCD" short for "American-Born Confused Desi," and "IBCD" short for "Indian-Born Confused Desi," insulting terms used to criticize people of Indian ancestry who are Americanized.

Infosys management ridiculed Mrs. Awasthi for celebrating Christmas, saying that "we" do not celebrate Christmas, and that she should not celebrate Christmas. Infosys management repeatedly discussed the quality of Mrs. Awasthi's work by explicitly commenting on their expectations for “a woman your age."

A spokesman for Infosys, Patrick McLaughlin, did not respond to an emailed request for comment on the lawsuit.

Dubai World Crisis Vs US Housing Crisis - Layman's Analysis

(Image courtesy - Wikimedia foundation )

I think this is the following layman's assessment

US Crisis Model -

1) Government Pushes Expansion of Housing as it sits on huge surplus/potential surplus. Keeps interest rates low for borrowers

2) Lenders fresh with bulk funds from investors and low interests push both consumers and constructors. (initially follow all regulations) Steady growth in prices of property

3) Once responsible borrowers have bought houses/property - Greedy Investors, Greedier Realtors push prices higher - and entice borrowers with poor credit history to buy houses. Investments Banks bet on these borrowers defaulting through Credit Default Swaps and Collateralize Debt obligations

4) At the tip of the bubble (mid 2006), the frenzy of buying starts faltering with the irresponsible borrowers (who bought in the 90s) start defaulting. As homeowner defaults increase, demand slumps due to lack of growth in economy, flood of cheap foreclosures in the market push down prices.

5) Even good houses and responsible borrowers start feeling pain as bad borrowers brought down all real estate asset prices. (with many of them also either forsaking the house or short selling for a loss)
- this results in IBs and insurance cos to forcefully pay the CDS and CDO - making them insolvent.- BAIL OUT BAIL OUT


BOTTOM LINE for US market
Borrowers (end users who bought houses) started defaulting because they owed banks more money than the value of the house.


Dubai Crisis Model -

1) Government of Dubai entity/organizations plan grandiose development for the city.
They evaluate the scope and possible returns and borrow money from investors to construct projects via contractors. The entity backs it up saying never decreasing oil prices will make Dubai a productive hub. So the valuation of property is based on increasing oil prices.
Update1 - Someone corrected me saying Dubai does not have oil, but the other emirates do! So Dubai just projected its potential based on the neighbors riches :)

2) Initially some sales of these projects pick up due to marketing etc. But once the credit crunch hits western world potential buyers start declining. Oil prices tumble to a point where Dubai can no longer fund projects with oil money (which it does not have - but was promised by neighboring emirates), so it steps up borrowing hoping for recovery.

3) With no buyers, and stagnant prices, there is no scope of paying back the borrowed investment money to the lenders by the Dubai world, etc entity. Dubai asks for 6 months moratorium on payments.
Companies are worried that even after 6 months, the huge amount of unoccupied real estate in Dubai will simply remain in present stagnant state. (Dubai govt/Dubai World cannot reduce prices as it will cause a downward spiral just like USA and cause present occupiers to forsake their places as nearby locations will become dirt cheap - at the same time, tight money supply is not bringing in new investors to buy Dubai property at current prices)

4) Renegotiation of Debt fails - and the Entity cries default ...


BOTTOMLINE - Dubai
In this type of crisis, there is no end user or home occupier/office lessee involved - the Debt of the constructing entity itself causes the default mess.

There are fears that Malaysia, Shanghai and of course Mumbai are having exact same models of construction - where some entity entices investors and promises huge returns and later finds out no one wants to buy whatever was built.

I am not an expert at all this but is my assessment correct?
Where is India's bubble position wrt these 2 scenarios - all thoughts appreciated

- Outcomes -
1. Global Commercial Real Estate crash - Ruled out - Emerging market Commercial Crash ??
2. Gulf Government Bailout on Oil Bonds - Abu Dhabi is unwilling as the UAE is not really United :P
3. Collapse in oil prices due to surplus from Russia, Nigeria, Venezuela and Iran - Keep checking oil futures
4. Definite yes - cost of insuring against default by High debt nations like Ireland, Bulgaria, Greece, skyrockets

दुबई = डूब-गई

Dubai Crisis Hitting Indian Real Estate

Dubai the much touted "financial" and "commercial" destination has become a desert bust.

MSM is trying to hide the crisis but they are not going to get away ... Will India's Housing Bubble should follow similar traits as what happened in Dubai?



http://www.youtube.com/watch?v=lfe89m8qqoI&feature=player_embedded

http://economictimes.indiatimes.com/markets/analysis/Dubai-Crisis-Caught-in-deserted-storm/articleshow/5277408.cms

http://economictimes.indiatimes.com/markets/analysis/Dalal-Street-likely-to-sail-through-the-Dubai-crisis/articleshow/5277181.cms

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8RD8uqjoLCQ&pos=2

http://www.moneycontrol.com/video/udayans-comments/indian-mkts-rattleddubai-default-impact_427590.html

Increase in prices sours revival in demand for real estate

Article Link

Mumbai: The much-heralded revival in home-building could come to nothing as property developers may have raised prices too much too soon, data from realty research company Liases Foras shows.

“Average prices in Mumbai corrected 34% after the downturn until March, following which we saw the maximum sales in two-and-a-half years between March and June,” Kapoor said. “However, realtors have increased prices since then (June), pulling down sales as of the quarter ended September.”

“This market is very price sensitive and not all locations have touched a fair price level,” Kapoor said. “For example, Andheri has seen no major drop in prices. Thane has seen the largest drop from Rs5,000 per sq. ft to Rs3,000 per sq. ft in March, now prices have again increased to Rs3,800 per sq. ft, affecting demand.”

“Sales have dropped 14% till September, affecting the efficiency of these companies. In January 2005, realtors had an inventory to sales ratio of 2:1, that worsened to 12:1 in November 2008, and improved only to 5:1 lately,” Kapoor said. “This means that prices have been increased and inventory has been allowed to build up, a clear sign of an asset bubble.”