On the day they were fired early last year, about 40 IT employees at Molina Healthcare Inc. had been gathered in a conference room for what they were told would be a planning meeting. At the same time, laptop computers were being collected from the assembled workers' desks.

During the meeting, Molina's then-CIO, Amir Desai, informed the workers that they were being laid off for financial reasons, "not because of [their] performance."

The layoffs came amid rising tensions over a number of issues, including the expanding role of an offshore IT contractor at Molina.

The workers raised the concerns with Desai during the meeting.

"I felt they were expecting us to be asking questions about Cobra and unemployment and all that," said Bonita Shok, one of the laid-off IT employees. "Instead, we were being quite confrontational about why they are laying us off and keeping all these H-1B workers."

"I have never experienced a group of employees who were so angry," said a human resources manager who was in the meeting to answer questions from employees about benefits. The HR manager asked not to be identified.

"They felt their work was being offshored -- they were angry at the H-1B employees that were being hired," said the longtime HR industry veteran who had been hired to execute the IT layoffs at Molina, a managed healthcare provider that serves Medicaid and Medicare recipients. "I [had] never felt the backlash that I felt from Molina employees."

The employees, who lost their jobs in January 2010, never got answers to their questions about the company's IT outsourcing strategy.

Instead, 18 of them filed a lawsuit in California state court earlier this year against Molina, its CIO at the time and its outsourcing contractor, Cognizant Technology Solutions.

The HR employee, who was later laid off as well, is a witness for the plaintiffs in the case.

The plaintiffs contend, among other things, that they are victims of discrimination due to national origin. The lawsuit charges that the employees were fired because the companies sought to employ people "whose national origin, race and/or ethnicity was exclusively Indian," and didn't want to employ Americans or green-card holders.

Molina contends that the lawsuit is grounded in "falsehoods and malicious gossip." Cognizant has said that the lawsuit is without merit and that it "will vigorously contest it."

Desai, through his attorney, says the lawsuit is itself guilty of "an unfair discriminatory bias." Desai himself has since left Molina.

Of the workers who are part of this suit, 10 brought an earlier claim against Molina that was settled in mediation before this case was filed. The mediation agreements did not settle the case for all the workers and did not include current lawsuit defendants Cognizant and Desai.

While what happened at Molina is still in dispute, job displacement because of offshore outsourcing is a fact of life in today's IT workplace. While there are no government numbers that detail its extent, the broad outlines of the story told by the Molina workers should be familiar to other IT workers.

Outsourcing engagements often start when offshore IT services companies bring in workers, typically on H-1B or L-1 visas, to learn a company's IT processes. Then the work is moved overseas. Molina employees contend that's what happened to them.