Did Disney Discriminate Against U.S. Employees and Replace Them With Immigrants?

When large companies enter into the immigration debate, they lobby for an increase in the number of H-1B visas available. The 85,000 visas are issued annually via a lottery to highly specialized and skilled workers and are usually paid for by the companies that seek to hire them. The bulk of the visas go to first time applicants, with the remaining 20,000 going to foreign students graduating from American universities.

Applicants must have a bachelor’s degree or higher, or in the alternative, have such specialized training that would be equivalent. Most importantly, any company that employs individuals via an H-1B visa must sign a declaration that American workers are not being displaced. A new lawsuit exposes how companies not only displace American workers, but that the H-1B visa program has been abused by the use of outsource companies.

In October 2014, Disney informed 250 workers in Orlando, Fla., that they were being laid off. The bulk of the employees were tech workers that kept the complex Disney data systems running, with the remaining in the accounting and administration departments. They were given a 90 day notice with the promise of a generous severance, as well as help with finding a new job. The caveat to receiving the severance package was that they had to continue to satisfactorily perform their duties until their separation date.

Shortly thereafter, the employees found themselves training foreign contract workers who spoke very little English and had little knowledge of the jobs they were filling. The employees would learn that “satisfactorily performing” their duties included making sure that their replacements could do their jobs just as well as them.

The lawsuit was filed in federal court earlier this month by several former employees claiming that their layoffs violated the H-1B visa rules by displacing American workers. Since being laid off in January 2015, the defendants claim they have applied for several positions at Disney and have not been rehired and some have been unable to find new employment. Some of those laid off had been with the company a decade or more and were older. They also had specialized training and knowledge of their positions that couldn’t easily be replaced.

The majority of the positions were filled with contract, H-1B visa workers through two global outsourcing companies based in India. Many of the foreign workers were from India and, according to the lawsuits, were being paid less than the employees they replaced. How much less is unclear, though the federal rules require that the foreign workers must be paid at least $60,000 per year. Furthermore, since the outsourcing company is the actual employer of the workers, Disney was not responsible for other employer related costs such as benefits and insurance. This also means that Disney only officially employs approximately 10 H-1Bs in Orlando, instead of the hundreds that now work there.

Outsourcing companies have become the biggest winners of the H-1B visa lottery, even beating out other large tech firms like Microsoft of Google. These companies were able to obtain 40 percent of the available visas since there is no limit to the number of applications a company can submit, which cost $4,000 per employee. The application process opens up on April 1 of each year, with 233,000 applications received in 2015. Last year two-thirds of the applications were denied because the quota had been met.

The lawsuits claim the outsourcing companies have violated the rules by knowingly displacing American workers. They further claim Disney colluded with the companies by requiring the now terminated employees to train their replacements in order to receive their severance packages. They also allege they were blacklisted from the company, the largest employer in the Orlando area, claiming they were told they would not be re-hired for at least a year, if ever, despite assurances to the contrary. Furthermore, only a few of the nearly 300 terminated workers were rehired, and reportedly at lower pay.

The lawsuit is the first to directly challenge the visa program. In addition to the legal action, many of the employees that were laid off have also filed complaints with the Equal Employment Opportunity Commission, claiming they were discriminated against for being American citizens. Furthermore, The Labor Department has opened an investigation into the outsourcing companies Disney used. The investigation is ongoing.

Photo credit: Thinkstock


Siyus Copetallus
Siyus Copetallus2 years ago

Thank you for sharing.

Christina Klein
Christina Klein3 years ago


Marie W.
Marie W3 years ago

Capitalism as practiced in the USA.

Nimue Pendragon


Erasmo J.
Erasmo J3 years ago

I don't know why you complan and moan since you love capitalism so much??? this is pure capitalism at its best...!!!

Fi T.
Past Member 3 years ago

Equality and fairness

sheila haigh
sheila haigh3 years ago

This has been going on increasingly for the last few decades, right across the world. Extra staff are needed - jobs don't get advertised locally any more - if someone asks for work, is told no vacancies - recruitment outsourced to overseas agency - suddenly, a load of foreign workers appear at work, on low wages from said agency, the agency creaming off a thick slice of the fees charged, the company simply paying a fixed fee to the agency and no longer having to pay for employee benefits like pensions, health insurance, severance pay, etc., and can dump the foreign worker whenever they like with no further responsibility. And everyone can claim they're doing nothing wrong. Let's call this what it is - job-laundering. We've seen different parts of the cycle at work, but never enough to fully understand the how the whole system worked. Well, perhaps these big organizations are finally overreaching themselves and becoming too blatant about it. Well done to the Disney ex-employees for standing up for themselves, exposing the whole racket and pursuing their case, I hope they are successful. But it's time for everyone to stand up and say enough's enough. The original intention of the visa laws is being circumvented. We are told we can't have laws which give first preference to local people as that would be discriminatory, but these job-laundering schemes are, by their very nature, discriminatory against local people, as local people are not even given a chance to apply. T

Christel K.
Christel K3 years ago

This article is so full of wrong information, it is ridiculous.
H-1B visas are not distributed through a lottery. Companies who want to hire foreigners on an H-1B visa have to apply to the Department of Labor (LCA). The pay application fees. The LCA can grant the permission - or not. There is a cap of 65,000 H-1B visas (not 85,000) but universities and research facilities are exempt from this cap and can hire additional foreigners on H-1B visas. This is typically used for highly qualified researchers.
H-1B visas are only for temporary work in the USA, and the payment of workers must be equivalent to payment for US residents.
It is not as easy as the author suggests - that Disney just gets H-1B visas and hires foreign workers and kicks out their own employees.
The company who did the outsourcing process for Disney is Cognizant, and they are being sued. And, if all allegations prove correct, they should receive severe punishment.

Julie Neves
Julie Neves3 years ago

They think about saving money. Sad for everybody. Immigrants are lucky to work, they should work, it's better than roaming in the streets. But when the companies will find another "cash-saving" stategy, they may be put aside. It's sad.

Ana Luisa Luque M.

Even in Mexico is happening. Every job done by an experience, senior executive is now done by two or three young people who an be fired at any given time.