By: Bruce Buchanan, Sebelist Buchanan Law
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U.S. District Judge Gregory A. Presnell agreed with Walk Disney Parks and Resorts U.S. Inc., and consulting firms, Cognizant Technology Solutions and HCL, that the former Disney employees’ allegations that Disney and the consulting firms conspired to replace Disney employees with foreign workers in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) were unsupported by the law. In so finding, the judge said claims that the consultants made false statements in applications to obtain H-1B visas for the foreign workers relied on a misunderstanding of the law, and were fatal to the RICO actions and related claims.

Dena Moore and Leo Perrero sued Disney and Cognizant Disney and HCL, respectively, on January 25, 2016. Moore and Perrero, who are both Americans, claimed Disney conspired with the consultants to replace 200 to 300 U.S. employees with people hired under the H-1B program, which provides temporary visas for nonimmigrant skilled workers.

The civil RICO claims against HCL and Cognizant were based on the allegation that they engaged in racketeering activity by falsely stating on required Labor Department forms that the hiring of the nonimmigrant H-1B employees would not adversely affect the working conditions of similarly situated employees. Perrero and Moore claimed their firings did just that. HCL and Cognizant argued that the requirement applied only to their own employees, not Disney’s. Judge Presnell agreed, noting the working conditions requirement mentions “its U.S. worker employees.”

Furthermore, the judge found the certification that H-1B employees would not displace American workers does not apply to H-1B workers, who earn at least $60,000 a year and have certain education or skill levels.

This has been a highly visible litigation with most experts expecting dismissal of the claims. Given the nature of the claims, it is expected that Moore and Perrero will appeal the dismissals.