Recent legal documents reveal that twelve current and former employees from TSMC's California and Arizona facilities have accused the company of racial discrimination in recruitment, promotion, and employee management practices. TSMC declined to comment on the ongoing litigation but has issued a statement in response.
According to reports from media outlets including The Register and Tom's Hardware, citing a report by Forbes, the complaint alleges that TSMC has an "intentional pattern and practice of employment discrimination against individuals who are not of East Asian race, not of Taiwanese or Chinese national origin, and who are not citizens of Taiwan or China, including discrimination in hiring, staffing, promotion, and retention/termination decisions." The plaintiffs are primarily of European, African, or Latino descent.
The complaint further claims that "TSMC routinely subjects non-East Asians (including those who are not of Taiwanese or Chinese descent) to a hostile work environment where verbal abuse, gaslighting, isolation, and humiliation is common, and oftentimes leads to the constructive discharge of these employees."
This lawsuit was initiated in August by Deborah Howington, a former talent acquisition director at TSMC's US site, who claimed that "non-Asian employees and non-Taiwanese citizens are subjected to a stricter level of scrutiny than similarly situated Asian employees (including Taiwanese citizens)."
If the class action is successfully filed, the plaintiffs will seek monetary compensation and demand structural reforms at TSMC. A jury trial has been requested, and a federal district court in northern California is expected to respond by December 13.
Lawsuit asserts three alleged forms of discrimination
Reportedly, the lawsuit asserts that TSMC allegedly discriminates against some employees in three ways.
First, TSMC shows a preference for hiring East Asian, Taiwanese, or Chinese employees, even directly providing resumes of candidates from Taiwan or China with work permits to the US HR department, which "then simply hires these Taiwanese/Chinese candidates without question, even if no open roles have been posted in the US." Additionally, although TSMC operates mainly in English in its US business, many job postings reportedly still list Mandarin/Chinese as a preferred qualification.
Second, the lawsuit alleges that non-Asian employees and non-Taiwanese citizens "are frequently denied opportunities to advance and succeed at TSMC." For instance, some internal meetings are conducted in Chinese, and certain documents are written in Chinese, preventing non-Chinese speaking employees from participating or acquiring skills.
The complaint further claims, "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 (Chinese English)' when Asians wanted to limit the information being shared with non-Asians and/or to try to confuse them."
The third form of discrimination involves differential treatment towards non-Asian and non-Taiwanese employees, resulting in them being "either terminated or constructively discharged at much higher rates than their East Asian counterparts." TSMC then allegedly replaces terminated employees with personnel sent directly from Taiwan rather than recruiting locally.
Furthermore, the suit claims that since 2022, "TSMC Arizona and TSMC North America have removed the majority of non-East Asian managers and leaders hired by the subsidiaries and replaced them with East Asian employees, maintaining non-East Asians in management roles primarily only in a select number of customer - or public-facing positions."
TSMC's response
In response to this news, TSMC declined to comment on ongoing litigation but stated, "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 any concerns constructively."
