Meta must face lawsuit claiming it prefers cheaper foreign workers
Feb 25 (Reuters) - A federal judge on Tuesday said Meta Platforms (META.O), opens new tab must face a lawsuit claiming that the Facebook and Instagram parent prefers to hire foreign workers because it can pay them less than American workers.
U.S. Magistrate Judge Laurel Beeler in San Francisco said three U.S. citizens who accused Meta of refusing to hire them though they were qualified may pursue a proposed class action.
Meta and its lawyers did not immediately respond to requests for comment.
The plaintiffs -- information technology worker Purushothaman Rajaram and software engineer Ekta Bhatia, both naturalized U.S. citizens, and data scientist Qun Wang -- said they each applied for several Meta jobs between 2020 and 2024, but were turned down because of Meta's "systematic preference" for visa holders.
Meta, based in Menlo Park, California, said there was no proof it intended to discriminate, or would have hired the plaintiffs if they were not U.S. citizens.
But the judge cited statistics that 15% of Meta's U.S. workforce holds H-1B visas, which typically go to foreign professionals, compared with 0.5% of the overall workforce.
She also cited Meta's October 2021 agreement to pay up to $14.25 million, including a civil fine, to settle federal government claims, opens new tab it routinely refused to consider American workers for jobs it reserved for temporary visa holders.
"These allegations support the plaintiffs' overall complaint that they were not hired because Meta favors H-1B visa holders," Beeler wrote.
The government had sued Meta in December 2020, seven weeks before President Donald Trump ended his first White House term.
"We are hopeful that the lawsuit will help remedy the favoritism towards visa workers that is common in the tech industry," Daniel Low, a lawyer for the three plaintiffs, said in an email. "Fully addressing the issue will require additional enforcement or legislative reform."
Beeler had dismissed an earlier version of the lawsuit, which named only Rajaram as a plaintiff, in November 2022.
A divided federal appeals court revived the case last June, saying a Civil War-era law barring discrimination in contracts based on "alienage" protected U.S. citizens from bias.
Many conservative groups have cited that law, Section 1981 of the Civil Rights Act of 1866, in challenging diversity initiatives in the workplace, which Trump also opposes.
The case is Rajaram et al v Meta Platforms Inc, U.S. District Court, Northern District of California, No. 22-02920.
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Reuters
2 hours ago
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Trading Day: Market inflection points abound
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Investors know growth is slowing and that the second half of the year will be challenging, so that's already 'in the price'. Hopes of a de-escalation in the trade standoff between the U.S. and China, and for bilateral deals between the U.S. and other key trading partners soon are supporting risk assets. The S&P 500 hit a three-month high on Tuesday, while the Nasdaq and MSCI World index climbed to levels last visited in February. It is the strength on Wall Street, most latterly tech, that is lifting global stocks as benchmark Asian and European indices are flatlining. On the whole, policymakers continue to stress that they are data-dependent and will move on rates carefully and calmly. That was the message from various Fed officials this week and Bank of England Governor Andrew Bailey on Tuesday. It's a slightly different - although no less challenging - situation in mainland Europe, where figures on Tuesday showed disinflationary forces are driving consumer prices as much as anything else. Euro zone inflation dipped below the European Central Bank's 2% target in May, cementing expectations rates will be cut this week and later this year. Meanwhile, Switzerland experienced outright year-on-year deflation for the first time in four years, raising the possibility that the Swiss National Bank may soon reintroduce negative interest rates. Canada's central bank is expected to hold interest rates at 2.75% on Wednesday for a second meeting. Growth and inflation have been surprisingly sticky this year, and rates have been slashed by 225 basis points since last June. As UBS analysts note, markets are generally at an inflection point, waiting for the catalyst that will break them out of the narrow ranges that have broadly held since the U.S. and China announced a temporary reduction on tariffs on May 12. Even Wall Street and the dollar - one creeping higher, the other drifting lower - are awaiting a trigger for a proper breakout. Could the telephone call between U.S. President Donald Trump and Chinese leader Xi Jinping expected later this week be it? Foreign exposure to U.S. assets may be lower than feared It is widely believed that investors around the world have a disproportionately high exposure to U.S. assets, particularly stocks, an imbalance that could roil U.S. markets if corrected. But what if these fears are overblown? Several eye-popping statistics suggest that America's weight in world financial markets is even greater than its outsized economic might. Most strikingly, the U.S. net international investment position (NIIP), or foreign investors' holdings of U.S. assets less U.S. investors' holdings of overseas assets, at the end of 2024 was $26 trillion. That's nearly 24% of global GDP, up from 16% only two years earlier, a surge driven by foreigners' insatiable appetite for U.S. equities, mainly "Big Tech". Demand was so hot that, by some measures, the value of U.S.-listed stocks at the turn of the year represented 74% of total global market cap. That share was 60% six years ago, and less than half in 2011. But the attractiveness of dollar-denominated assets is now being questioned, as the often erratic policies of U.S. President Donald Trump have upset longstanding economic and geopolitical norms, making governments and investors question whether Washington is still a reliable partner on the global stage. The concern is that this eroding confidence triggers a reversal of the massive flows into Wall Street seen in recent years that has damaging spillover effects. Such a correction may not require outright selling. Given the scale of the flows involved, just less buying among foreign investors could be enough to cast a shadow over the world's most important stock market. And the running assumption is foreign investors don't have the capacity or willingness to increase their exposure to U.S. assets, creating a significant long-term downside risk for Wall Street, Treasuries and the dollar. "A structural shift is underway: the slow erosion of US economic dominance," analysts at Deutsche Bank wrote on Monday. But looked at another way, foreign exposure to U.S. assets may not be as high as initially meets the eye. That's the view of analysts at JP Morgan, who measure portfolio investment in U.S. bonds and equities as a share of countries' total household sector financial assets. 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Powys County Times
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