Stacy v. Tata Consultancy Services Ltd.

          MEMORANDUM OPINION

          KEVIN MCNULTY. U.S.D.J.

         Plaintiffs Darryl Stacy, Donald Stephen Bradley, and Hesham Hafez bring this action against defendant Tata Consultancy Services, Ltd., alleging that its hiring practices amounted to disparate treatment on the basis of race and national origin in violation of 42 U.S.C. § 2000e, et seq., and 42 U.S.C. § 1981. Defendant now moves against plaintiff Hesham Hafez to compel Hafez to arbitration and to dismiss the complaint as to him only.

         I will deny the motion to dismiss as presented, order targeted discovery, and allow the parties to raise the issue of arbitrability on a motion for summary judgment.

         I. FACTUAL BACKGROUND^[1]

         For purposes of a Rule 12(b)(6) motion, the well-pleaded allegations of the Complaint are assumed to be true and all reasonable inferences are drawn in favor of the plaintiff. See New Jersey Carpenters & the Trustees Thereof v. Tishman Constr. Corp. of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014). Because defendant's motion to dismiss and to compel arbitration is directed only at plaintiff Hesham Hafez, and not the other plaintiffs (See Def. Mot. at 4 n. 1), I summarize only the relevant allegations relating to Hafez.

         Defendant Tata Consultancy Services, Ltd. ("TCS") is an Indian company that provides consulting, technology, and outsourcing services. TCS has approximately 32, 000 employees in the United States. TCS operates approximately 19 offices in the United States, with its principal place of business in Edison, New Jersey. (Comp. ¶¶ 1, 7, 9).

         Plaintiffs allege that TCS's U.S.-based workforce consists disproportionately-approximately 80%-of persons of South Asian or Indian origin. That state of affairs, Hafez alleges, is the result of discriminatory hiring preferences that disfavor non-members of those ethnic groups. (Comp. ¶¶ 1, 13).

         Hafez is a resident of Bethel, Connecticut. He has advanced training and job experience in informational technology ("IT") services, with over twenty years of professional experience in that field. (Comp. ¶ 5). Hafez is a U.S. citizen of Egyptian national origin and Caucasian race. (Id.). He does not identify himself as South Asian or Indian.

         In April 2015, Hafez began working for the Royal Bank of Scotland ("RBS") in Stamford, Connecticut, where he consistently received positive performance reviews and was never disciplined. (Comp. ¶ 26). In January 2018, RBS contracted with TCS to provide a large portion of the IT services that RBS required. As a result, RBS terminated many of its IT employees, including Hafez. (Comp. ¶ 27).

         On January 11, 2018, Hafez attended a TCS information session for soon-to-be-terminated RBS employees. There, Hafez learned that TCS was interested in hiring soon-to-be-terminated RBS employees. One open TCS position was that of systems administrator, the position then held by Hafez at RBS. (Comp. ¶ 27).

         The next day, Hafez applied for the systems administrator position at TCS, indicating that he had held the systems administrator role at RBS since April 2015. (Comp. ¶ 28). Hafez was the only RBS employee who performed the systems administrator role in Stamford and was the only displaced RBS employee who applied for the corresponding job at TCS. (Id.).

         TCS often hires employees from clients who have outsourced their in-house IT services to TCS. (Comp. ¶ 12). TCS has recognized the benefits of doing so, noting that these candidates are often well-suited for servicing a client with whom they are already familiar. (Comp. ¶ 12).

         On January 24, 2018, Hafez interviewed with TCS for the position. Despite calling and emailing TCS multiple times over several months regarding the status of his application, he never received a response. (Comp. ¶ 29). On February 15, 2018, Hafez received a termination letter from RBS effective April 17, 2018. (Comp. ¶ 30). From January through April 2018, Hafez was required to train the person that TCS did hire for the systems administrator role. That person, says Hafez, was a man of South Asian race and Indian national origin who had minimal experience and was largely unqualified for the position. (Id.).

         Hafez alleges that TCS's conduct in not hiring him constituted willful and unlawful discrimination on the basis of his race, which led Hafez to incur financial and emotional damages. (Comp. ¶¶ 35, 39)

         TCS moves to dismiss the complaint as to Hafez only, and to compel Hafez to arbitrate his claims based on an arbitration provision contained in the online application Hafez completed when he applied for the systems administrator position at TCS. (See Def. Mot.). Because the parties' arguments as to arbitrarily potentially require the court to receive evidence, I will deny the motion to dismiss, order limited discovery to the extent necessary, and allow the parties to raise their arguments regarding arbitrability in the form of a summary judgment motion. See Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013).

         II. LEGAL STANDARD

         Where the issue of arbitrability can be decided without evidence, it will be, based on the application of the familiar Rule 12(b)(6) standard to the face of the pleadings. Failing that, however, the Court will permit discovery and decide the issue on a summary judgment standard, pursuant to the procedures laid out in Rule 56. If there is a ...