A lawsuit brought by American technology workers against Walt Disney Company and two outsourcing companies, Cognizant Technology Solutions and HCL America, suffered a setback this week when a federal judge dismissed the plaintiffs’ claims. The plaintiffs, who worked at Disney, were laid off and forced to train foreign replacements, claim that Disney conspired with the outsourcing companies in violation of visa laws. According to the New York Times, the plaintiffs argued that Disney and the outsourcing companies colluded to make false statements when they applied for H-1B visas. When applying for H-1B visas, outsourcing companies need to show that hiring foreigners will not “displace any similarly employed U.S. worker.” However, the companies argued contend this only applies to them if the Americans that had been displaced by the foreigners had originally been either Cognizant or HCL employees, not Disney’s, as was the case here. Persuaded by this line of reasoning, the presiding judge ruled in favor of Disney.

This issue has much larger rippling effects that extend beyond the scope of this case. Outsourcing has become a dominant business model in the technology industry, and this case set yet another pro-corporation precedent that some fear will continue the trend of significant layoffs for tech workers.