TSMC sued for race and citizenship discrimination at its Arizona facilities

[tonyget]

TSMC is being sued by current and former employees, including a talent acquisition director, over alleged employment discrimination. The employees claim that TSMC, the world's largest chipmaker, has favored employees who are Taiwanese citizens and forced out American workers. Forbes first reported on the suit.

The suit was first filed by Deborah Howington, a talent acquisition director, back in August. Howington claims she saw the HR department create a workplace in "which non-Asian employees and non-Taiwanesecitizens are subjected to a stricter level of scrutiny than similarly situated Asian employees (including Taiwanese citizens)." Since then, a dozen former TSMC staffers have also joined the suit.

TSMC is set to get $11.6 billion from the United States through the CHIPS and Science Act, with $6.6 billion in cash and $5 billion in loans. TSMC is using the funds to build a series of fabs at its plant in Arizona.

"Having accepted $6 billion in U.S. federal funding and elected to compete within the U.S., it’s imperative that TSMC comply with federal discrimination laws and treat all races, national origins, and citizens equally,” the plaintiff's attorney, Daniel Kotchen of Kotchen & Low told Forbes. “We’re confident in our case and look forward to presenting the case to a jury."

TSMC declined to comment on the litigation to Tom's Hardware, but added: "TSMC believes strongly in the value of a diverse workforce and we hire and promote without regard to gender, religion, race, nationality, or political affiliation because we respect differences, and believe that equal employment opportunities strengthen our competitiveness. We also provide various channels for employees to raise concerns, and strive to address concerns constructively."

Among the allegations in the complaint are that TSMC's HR team in Taiwan sends the U.S. arm of the company the resumes of candidates that have already been vetted and can work in the U.S., and then the U.S. team "simply hire these Asian/Taiwanese candidates without question, even if no open roles have been posted in the U.S." The suit also claims that a desire for Mandarin or Chinese language skills have been listed even if they wouldn't be required for the position and that the use of Mandarin is used to exclude employees that don't speak the language and limit their career advancement.

The suit also alleges that Taiwanese employees on visas are being used to reduce the number of union positions for U.S. workers.

There have been a number of reports that TSMC has been having trouble finding its footing in the United States, with concerns over labor practices driving away American workers with "several hundred" employees being brought in from Taiwan to meet deadlines. That's on top of TSMC having trouble adjusting to U.S. work culture.

In October, TSMC's U.S. president Rick Cassidy said that its Phoenix plant achieved a 4% better yield than comparable manufacturing sites in Taiwan in early tests, which is a good sign for the fab.

Not much money from the CHIPS act has changed hands yet, as the US government looks for strict milestones for chipmakers to receive taxpayer dollars. It's unclear if lawsuits over discrimination against American workers and hostile work environments will affect that further, as well as any changes that may occur to the CHIPS Act as the Biden administration wraps up and former President Donald Trump returns to the White House in January.

TSMC sued for race and citizenship discrimination at its Arizona facilities (updated)

TSMC has been accused of preferring Taiwanese employees.

www.tomshardware.com

 

[Daniel Nenni]

This is against the law now?

The suit also claims that a desire for Mandarin or Chinese language skills have been listed even if they wouldn't be required for the position and that the use of Mandarin is used to exclude employees that don't speak the language and limit their career advancement.

We used to hire people based on language without problem. It made doing business in foreign countries much easier.

"TSMC believes strongly in the value of a diverse workforce and we hire and promote without regard to gender, religion, race, nationality, or political affiliation because we respect differences, and believe that equal employment opportunities strengthen our competitiveness. We also provide various channels for employees to raise concerns, and strive to address concerns constructively."

Unfortunately that policy doesn't allow lawyers to make an obscene amount of money. They can get 30-40% of the settlement when they are based on a contingency fee.

 

[count]

This is against the law now?

The suit also claims that a desire for Mandarin or Chinese language skills have been listed even if they wouldn't be required for the position and that the use of Mandarin is used to exclude employees that don't speak the language and limit their career advancement.
We used to hire people based on language without problem. It made doing business in foreign countries much easier.

"TSMC believes strongly in the value of a diverse workforce and we hire and promote without regard to gender, religion, race, nationality, or political affiliation because we respect differences, and believe that equal employment opportunities strengthen our competitiveness. We also provide various channels for employees to raise concerns, and strive to address concerns constructively."

Unfortunately that policy doesn't allow lawyers to make an obscene amount of money. They can get 30-40% of the settlement when they are based on a contingency fee.

Depends on why the require the language skills, if the language skills are a job requirement, like for a translator, an account manager who deals with people in other languages, or even a manager who manages people in different languages, then it's perfectly legal and fair. But if it's not required for the job function and the company can't show otherwise, it could be seen as a form of discrimination.

The average technician working in the fab does not need to speak Chinese to do their job.

 

[Daniel Nenni]

Depends on why the require the language skills, if the language skills are a job requirement, like for a translator, an account manager who deals with people in other languages, or even a manager who manages people in different languages, then it's perfectly legal and fair. But if it's not required for the job function and the company can't show otherwise, it could be seen as a form of discrimination.

The average technician working in the fab does not need to speak Chinese to do their job.

It was not required, it was "desirable" which means it was a preference. It was very common to hire native speakers for field work and corporate customer support. Back then semiconductor conversations were mainly in English but the personal connection could be made in their native language. Blatant discrimination in today's terms. Back then not so much since making money was the #1 priority.

 

[Daniel Nenni]

"Having accepted $6 billion in U.S. federal funding and elected to compete within the U.S., it’s imperative that TSMC comply with federal discrimination laws and treat all races, national origins, and citizens equally,” the plaintiff's attorney, Daniel Kotchen of Kotchen & Low told Forbes. “We’re confident in our case and look forward to presenting the case to a jury."

TSMC has not accepted CHIPs Act money yet and what does this have to do with employment law? What does "elected to compete within the US" mean in this context?

Lawyers......

 

[Daniel Nenni]

"The suit also alleges that Taiwanese employees on visas are being used to reduce the number of union positions for U.S. workers."

Playing the union card, might as well since they are playing the race card. What fab positions are union?

 

[count]

It was not required, it was "desirable" which means it was a preference. It was very common to hire native speakers for field work and corporate customer support. Back then semiconductor conversations were mainly in English but the personal connection could be made in their native language. Blatant discrimination in today's terms. Back then not so much since making money was the #1 priority.

I think it'll be hard to really prove either way and will come down to a how a judge/jury sees whatever evidence is provided.

 

[Daniel Nenni]

I think it'll be hard to really prove either way and will come down to a how a judge/jury sees whatever evidence is provided.

I doubt it will see a jury. The majority of these cases are settled out of court or dropped.

 

[tedc]

In the Forbes article referenced, there's a bit more context on the language preferences:

"Part of the suit focuses on the company’s alleged preference for employees who can speak and write Mandarin Chinese. The plaintiffs claim that meetings and business materials were often communicated only in Mandarin, preventing English-speakers from doing their jobs and forcing them to decipher instructional texts with translation services. This was especially problematic when U.S. employees were required to undergo training in Taiwan; one person claimed a manager encouraged her to study Mandarin on the Duolingo app."

Playing the union card, might as well since they are playing the race card. What fab positions are union?

According to the article, union jobs = construction contractors.

Chips Giant TSMC Sued Over ‘Anti-American’ Discrimination

Taiwan Semiconductor Manufacturing Company was accused by a group of its U.S. employees of concocting a “discriminatory scheme” that favors Taiwanese foreign workers.

www.forbes.com

 

[hist78]

"Among the allegations in the complaint are that TSMC's HR team in Taiwan sends the U.S. arm of the company the resumes of candidates that have already been vetted and can work in the U.S., and then the U.S. team "simply hire these Asian/Taiwanese candidates without question, even if no open roles have been posted in the U.S." "

This is a good example of a frivolous lawsuit.

Like other multinational companies, such as Mercedes Benz, BMW, Airbus, BP, Volvo, Samsung, Toyota, and Honda, TSMC can bring employees to the US to work at its US subsidiaries through the E1/E2 Treaty visa programs. This process is a job transfer, with no need and no requirement to post the positions internally or externally. The U.S. has signed such treaties with many foreign countries, including the one with Republic of China (Taiwan) in 1948.

 

[Daniel Nenni]

In the Forbes article referenced, there's a bit more context on the language preferences:

"Part of the suit focuses on the company’s alleged preference for employees who can speak and write Mandarin Chinese. The plaintiffs claim that meetings and business materials were often communicated only in Mandarin, preventing English-speakers from doing their jobs and forcing them to decipher instructional texts with translation services. This was especially problematic when U.S. employees were required to undergo training in Taiwan; one person claimed a manager encouraged her to study Mandarin on the Duolingo app."

According to the article, union jobs = construction contractors.

Chips Giant TSMC Sued Over ‘Anti-American’ Discrimination

Taiwan Semiconductor Manufacturing Company was accused by a group of its U.S. employees of concocting a “discriminatory scheme” that favors Taiwanese foreign workers.

www.forbes.com

Unfortunately I cannot read the Forbes article without a subscription so I am being discriminated against. TSMC imported construction workers? Ridiculous. TSMC not hiring union labor? I believe that since most people prefer NOT to use union labor. I also say that intentionally doing meetings and materials in Mandarin only is ridiculous as well. I do not believe that for a second.

 

[blueone]

"Among the allegations in the complaint are that TSMC's HR team in Taiwan sends the U.S. arm of the company the resumes of candidates that have already been vetted and can work in the U.S., and then the U.S. team "simply hire these Asian/Taiwanese candidates without question, even if no open roles have been posted in the U.S." "

This is a good example of a frivolous lawsuit.

Like other multinational companies, such as Mercedes Benz, BMW, Airbus, BP, Volvo, Samsung, Toyota, and Honda, TSMC can bring employees to the US to work at its US subsidiaries through the E1/E2 Treaty visa programs. This process is a job transfer, with no need and no requirement to post the positions internally or externally. The U.S. has signed such treaties with many foreign countries, including the one with Republic of China (Taiwan) in 1948.

E1/E2 visas only apply to existing employees of the company. They aren't "hired" by the receiving organization. The process the lawsuit describes is that TSMC Taiwan has resumes from outside candidates in Taiwan, and proposes that the TSMC-AZ hire them, so E1/E2 visas wouldn't apply. Even if this process is occurring, it is not clear it is illegal, so long as the candidates have "special skills essential to the business". From my corporate experience, language skills are a recognized essential skill for multi-national companies in particular jobs.

 

[MKWVentures]

Interesting Lawsuit. Sounds more like "frequently used policies that we do not like" about this company than legal discrimination but that's why we have courts.

 

[hist78]

E1/E2 visas only apply to existing employees of the company. They aren't "hired" by the receiving organization. The process the lawsuit describes is that TSMC Taiwan has resumes from outside candidates in Taiwan, and proposes that the TSMC-AZ hire them, so E1/E2 visas wouldn't apply. Even if this process is occurring, it is not clear it is illegal, so long as the candidates have "special skills essential to the business". From my corporate experience, language skills are a recognized essential skill for multi-national companies in particular jobs.

I think you misunderstood or mixed the the E1/E2 Treaty visa with the H1 types of visas.

And for legal, business, and tax purposes, TSMC must incorporate an entity in Arizona, TSMC Arizona, to conduct business. TSMC Arizona must legally and formally hire a TSMC Taiwan employee, even in reality it's just a job transfer.

 

[blueone]

I think you misunderstood or mixed the the E1/E2 Treaty visa with the H1 types of visas.

And for legal, business, and tax purposes, TSMC must incorporate an entity in Arizona, TSMC Arizona, to conduct business. TSMC Arizona must legally and formally hire a TSMC Taiwan employee, even in reality it's just a job transfer.

Nope. I've been the receiving manager for an E1, and hired numerous H1B employees over the years. The E1 process is easy. The H1B process is disgusting.

 

[MKWVentures]

In the Forbes article referenced, there's a bit more context on the language preferences:

"Part of the suit focuses on the company’s alleged preference for employees who can speak and write Mandarin Chinese. The plaintiffs claim that meetings and business materials were often communicated only in Mandarin, preventing English-speakers from doing their jobs and forcing them to decipher instructional texts with translation services. This was especially problematic when U.S. employees were required to undergo training in Taiwan; one person claimed a manager encouraged her to study Mandarin on the Duolingo app."

So all training in Taiwan should be forced to be in English?.... and All meetings in US should be forced to be in English? Does this seem like a good idea?

Perhaps they should have put on the jobs that the person should be able to speak Mandarin.... oh wait... they did that.

 

[hist78]

Nope. I've been the receiving manager for an E1, and hired numerous H1B employees over the years. The E1 process is easy. The H1B process is disgusting.

The E1 applicant's current employment status with the foreign company from the Treaty country is irrelevant. His/her citizenship, skills and the length of residency at the foreign country is important. A person (not a TSMC employee) with ROC's (Taiwan) citizenship who had lived in Taiwan more than three years in his/her life but has been in US legally for the past five years, he or she can still receive E1 visa to work for TSMC Arizona.

 

[IMakeICsAtHomeJK]

I also say doing meetings and materials in Mandarin only is ridiculous as well. I do not believe that for a second.

Your conditional reads as if you would support the consequent (["TSMC illegally discriminated"]) given the antecedent (" . . . meetings and materials in Mandarin only . . . "). Indeed the register sums the issue up conveniently: "Allegedly it's hard to get ahead at the chipmaker unless you speak Mandarin". (Vigliarolo, The Register)
As a thought experiment, assume the following premises are true.
"One example of such practices is conducting some internal discussions in Mandarin, and routinely writing documents in Chinese – leaving some staffers unable to participate or learn skills." (Vigliarolo, The Register)
"A related practice was acknowledged in the Q3 2023 US HR quarterly all-hands meeting by Jen Kung, head of compensation, who casually commented on the use of 'Chenglish' when Asians wanted to limit information being shared with non-Asians and/or to try to confuse them," the complaint claims. (Vigliarolo, The Register)
"Plaintiff stories in the lawsuit describe multiple instances of such, with training documentation only provided in Chinese to American employees who only speak English, [ . . . ]" (Vigliarolo, The Register)
Would the veracity of the above propositions be sufficient evidence as to the lawsuit's claim of employee discrimination?
Personally, the befuddlement engendered by this claim stems from the fact that TSMC could have proactively prevented themselves from said accusation had the company explicitly stated Mandarin language requirements. Going one step further why even deal with the whole hassle, headache, et cetera of operating a fabrication plant abroad? There are concerns of natural disasters, yes, but omitting this risk does not clarify what TSMC has to gain from such a venture.

language skills are a recognized essential skill for multi-national companies in particular jobs.

No doubt about it. The question would be whether or not such language skills are required. If foreign language skills are not required, then does the instantiation of the preference contradict claims to said skills being unnecessary? More importantly: Is hiring based on a preference — not requirement — of language skills discrimination per se?
Assuming any of these allegations are true, is it even the case that internal usage of foreign languages could be construed as discriminatory? Assuming TSMC sought an environment wherein which Mandarin saw consistent and considerable use, why not formally affirm such an objective? Would avoid considerable peril from legal action, no?
[0] Brandon Vigliarolo, "TSMC's US operations threatened with employee discrimination class action"
https://www.theregister.com/2024/11/13/tsmc_usa_putative_employee_lawsuit/
[1] Daniel Low, "FIRST AMENDED COMPLAINT: Case 5:24-cv-05684-VKD"
https://regmedia.co.uk/2024/11/13/tsmc-discrimination-1ac.pdf

 

[hist78]

So all training in Taiwan should be forced to be in English?.... and All meetings in US should be forced to be in English? Does this seem like a good idea?

Perhaps they should have put on the jobs that the person should be able to speak Mandarin.... oh wait... they did that.

I don't know what is the best way or the right way for a multinational company to conduct a meeting. But I think this should be left to the company itself to decide.

Several years ago a friend told me a true story he had encountered at a large US technology company. The major development and internal support teams were in Asia for an issue they tried to solve. After several nonproductive meetings conducted in English, the division vice president had enough.

He told the teams to use the most fluent language they all know, instead of English, to discuss and debate. They just need to share the thoughts with him afterwards. They solved the issue quickly.

 

[IMakeICsAtHomeJK]

Perhaps they should have put on the jobs that the person should be able to speak Mandarin.... oh wait... they did that.

The issue at hand is whether or not TSMC's "preference" for Mandarin language proficiency amounts to — based on the wording of the Civil Rights Act of 1964 Title VII — a "Bona Fide Occupational Qualification" (BFOQ). One could certainly produce an argument for such a BFOQ: Taiwan Semiconductor Manufacturing Company Limited requires Mandarin to facillitate intellectual knowledge transfer. The negative argument is arguably simpler: the manufacturing of semiconductors does not inherently necessitate Mandarin. If there is no less discriminatory alternative available, then TSMC may have a legitimate claim to a BFOQ. What is confusing is that TSMC listed what seems to be a quasi-requirement as a preference. Id est, a 'must' was written as a "should". Again, why wouldn't TSMC make it easy on itself by listing Mandarin as requirement (must) instead of a preference (should)?