On Thursday, the 9th U.S. Circuit Court of Appeals in San Francisco revived a class action lawsuit by software engineer Purushothaman Rajaram, who alleges that Meta Platforms (META.O) declined to hire him in favor of foreign workers willing to accept lower wages. The court, in a 2-1 decision, ruled that a law from the Civil War era, which prohibits contract discrimination based on “alienage,” also protects U.S. citizens from such bias.
The appellate court’s decision overturns a prior dismissal by a California federal judge, allowing Rajaram, a naturalized U.S. citizen, to potentially represent thousands of workers who believe they were overlooked for employment in favor of cheaper visa holders.
Meta, the parent company of Facebook, Instagram, and WhatsApp, has yet to respond to the ruling. In court documents, the company denied any discriminatory practices, asserting that Rajaram could not prove an intent to discriminate against U.S. workers.
Daniel Low, Rajaram’s attorney, expressed that discrimination against U.S. citizens remains a pervasive issue in the technology sector, anticipating that the ruling will prompt further lawsuits aimed at ending such discrimination.
This ruling marks the first time the 9th Circuit has addressed whether Section 1981 of the Civil Rights Act of 1866, which also prohibits racial discrimination in contracts, extends to hiring biases against U.S. citizens. This interpretation contrasts with a 1986 decision by the 5th Circuit in New Orleans, which did not recognize such protections for U.S. citizens, potentially setting the stage for the U.S. Supreme Court to review the matter if Meta decides to appeal.
The decision could significantly impact ongoing and future lawsuits alleging bias against U.S. workers, especially in the nine states under the jurisdiction of the 9th Circuit. Unlike Title VII of the Civil Rights Act of 1964, which caps damages and requires filing complaints with government agencies before suing, Section 1981 allows plaintiffs uncapped damages if successful in their lawsuits.
This case emerges amidst other legal challenges, such as last year’s $25 million settlement by Apple in a lawsuit alleging illegal hiring preferences for immigrant workers, and a recent call by a conservative legal group for a federal probe into Tyson Foods for supposedly favoring foreign workers, including those illegally in the U.S., allegations Tyson has vehemently denied.
