Molina officials, in a written response to a Computerworld query, said the action is "nothing more than a shakedown lawsuit brought by a plaintiff's attorney who -- when the company refused his ridiculous financial demands -- filed a legal action grounded in falsehoods and malicious gossip."

Otto said he never made any demands and he had initially sought mediation.

Molina, in its statement, also said that "we will win in court because specific allegations in the lawsuit have been examined and found false. The fact that the general allegations also provide no basis for legal claims confirms that this plaintiffs' attorney included them solely for media attention."

Molina said it is an American company "employing more than 4,200 Americans," and that "less than 50 of our employees are H1B visa holders and they were hired only in cases when it was necessary to cast a wider net for particular skills."

The lawsuit says that on Jan. 14, 2010, one day after the U.S. Department of Labor approved Cognizant's application for 40 H-1B workers, Molina fired 40 programmers, security analysts and managers.