The Molina workers said they trained Cognizant workers on the company's IT processes over time prior to the layoffs. They were told that the contractors were taking over all the production and their role would shift to new developments and technologies.
That explanation did little to lessen fears that they were being pushed aside. "There was a point where I felt we were just being written off," said David de Hilster, one of the laid-off IT professionals.
In the weeks leading up to the layoff, Molina employees began spending more and more time training Cognizant workers. The process became increasingly "urgent" and rushed, he said.
Another laid-off employee, Charles, said that "one person came into our department to learn all of our processes, which is impossible. We're multiple types of employees doing deployments, doing development work. No one person could possibly gather all that much knowledge in two weeks' time."
Charles asked that his last name not be used.
Desai's attorney, Raskin, wrote that his client "was trying to maintain quality and keep IT costs down at the direction of his superiors. To accomplish this, Mr. Desai worked with his managers to identify processes and projects that could be outsourced at a lower cost.
"The question was not: 'Whose job can we eliminate and replace with a contractor?' The question was: What processes are being done in-house that could be outsourced at a lower overall cost without sacrificing quality of efficiency?" he added.
Otto has assembled witnesses to support the lawsuit.
Among them is Laura Onufrock, Molina's former IT department budget manager.
In lawsuit filings, Molina said it compared the cost of imported labor to the cost of U.S. workers at the company and found that the average pay for U. S. workers was $50 per hour versus $72 per hour for the Indian contractors and $26 an hour for offshore workers, according to the lawsuit. Based on Onufrock's analysis, the lawsuit claims that after the mass layoff last year, the IT department exceeded its annual budget by over $5.5 million three months into 2010.
Onufrock isn't a plaintiff. Asked why she was acting as a witness in this case, she said, "they've done a lot of damage to people and I'm hoping I can help."
Molina disputes the contention that the outsourcing efforts didn't cut IT costs.
"American taxpayers are demanding that health care companies reduce administrative costs in order to provide better benefits at a lower price," the company said in a statement.
"Like most leading health care companies, Molina has put in place a variety of measures to reduce costs, including the outsourcing of labor-intensive administrative tasks to specialized firms. Working with Cognizant, an established leader in outsourcing, Molina embarked on a successful program to reduce its overhead so it could focus on what it does best: providing America's underserved communities with access to the best possible health care," the company said.
It is unclear how many Molina contractors were on either H-1B or L-1 visas, which are used for company transfers. The distinction is important.
Companies can hire H-1B workers without first trying to hire U.S. workers, unless they are considered "H-1B dependent" -- a status that applies to companies where more than 15% of the people in the workforce hold H-1B visas. Cognizant is in that category, but it doesn't have to prove that it tried to hire U.S. citizens before hiring H-1B visa holders for jobs that pay more than $60,000 and/or require master's degrees.
"I don't think the H-1B dependent provisions are strong enough to protect U.S. workers," said Daniel Costa, an immigration policy analyst at the Economic Policy Institute.