By Daniel Wiessner
(Reuters) – A U.S. appeals court on Thursday revived a proposed class action lawsuit by a software engineer alleging that Meta Platforms refused to hire him because it preferred to give jobs to foreign workers who receive lower wages.
The U.S. 9th Court of Appeals in San Francisco has ruled by a 2-1 majority that a Civil War-era law prohibiting discrimination in contracts based on “alienation” also applies to prejudice against U.S. citizens.
The decision reverses a California federal judge’s dismissal of a lawsuit from Purushothaman Rajaram, a naturalized U.S. citizen. Rajaram says Meta is skipping American workers for jobs in favor of cheaper visa recipients. Rajaram seeks to represent a class that includes thousands of workers.
Meta, which owns Facebook, Instagram and WhatsApp, did not immediately respond to a request for comment. The company has denied wrongdoing in court filings and said Rajaram has failed to show that Meta intended to discriminate against U.S. workers.
Daniel Low, an attorney for Rajaram, said bias against U.S. citizens is a major problem in the tech industry.
“We expect this ruling will lead to more lawsuits seeking to end this discrimination,” Low said in an email.
The 9th Circuit had never before addressed the question of whether federal law, Section 1981 of the Civil Rights Act of 1866, protects American citizens from discrimination in hiring.
The only other appeals court to have heard the issue, the New Orleans-based 5th Circuit, said in a 1986 decision that the law does not prohibit bias against U.S. citizens. The split created by the 9th Circuit on Thursday raises the possibility that the U.S. Supreme Court could hear the case if Meta appeals.
Conservative groups are increasingly invoking Section 1981, which also prohibits racial discrimination in contracting, to challenge companies’ diversity initiatives and the hiring of foreign visa workers.
Thursday’s decision could be a major boon for plaintiffs in a growing number of cases alleging bias against U.S. workers, at least in California and the eight other states covered by the 9th Circuit. Unlike Title VII of the Civil Rights Act of 1964, the federal law that prohibits workplace discrimination, Section 1981 does not cap the damages plaintiffs can receive if they win cases, and it does not require them to file complaints with government agencies before filing suit.
Apple last year agreed to pay $25 million to settle a U.S. government lawsuit accusing the tech giant of illegally favoring immigrant workers over U.S. citizens and green card holders for certain jobs. The company denied wrongdoing.
And last month, a conservative legal group founded by former Trump administration officials called for a federal investigation into Tyson Foods’ alleged practice of disproportionately hiring foreign workers, including minors and people in the U.S. illegally. Tyson called the allegations “completely false.”
(Reporting by Daniel Wiessner in Albany, New York; Editing by Bill Berkrot, Alexia Garamfalvi and Nick Zieminski)
