TSMC’s troubles with its Arizona plant continue to mount, with the company now facing an “anti-American” discrimination lawsuit.

TSMC’s efforts to produce chips in the US have been mired with issues, some technical and some cultural. The latest issue, however, could land the company in legal trouble. According to Forbes, the suit was filed by Deborah Howington, one of the company’s talent acquisition executives who claims the company discriminates in its hiring process. According to the suit, TSMC favored Taiwanese employees and job candidates, even engaging an “Asian headhunter” to hire them. At least a dozen former TSMC employees have joined the lawsuit.

Listen to our chat on the TSMC lawsuit alleging anti-American” discrimination!

“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,” Daniel Kotchenthe, a partner at Kotchen & Low, the firm representing the plaintiffs, told Forbes. “We’re confident in our case and look forward to presenting the case to a jury.” Kotchen & Low recently won a class action lawsuit against staffing giant Cognizant, which was accused of favoring Indian workers on H-1B visas over local hires.

TSMC has not commented on the lawsuit, but provided the following statement to Forbes:

“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,” a company spokesperson told the outlet. “We also provide various channels for employees to raise concerns, and strive to address concerns constructively.”

TSMC has angered workers and some industry insiders with a number of actions and revelations. In early 2024, the company revealed that chips produced in Arizona would cost more than those produced in Taiwan. At the same time, the company cannot produce its latest chips in Arizona, due to Taiwanese law. The company also drew criticism for bringing in workers from Taiwan to help speed up construction of its Arizona facilities, saying American workers were to blame for construction delays. Workers, on the other hand, have accused the company’s “operational mismanagement and administrative chaos are responsible for the delays.

“They keep saying we’re slowing them down, but they’re not giving us the information we need,” a pipe cutter, who worked on the project for roughly a year, said in mid-2023. “Most of us are capable of doing it if you gave us the correct information.”

“At Intel, they can give me a package that says, ‘Hey, this is the equipment that I want you to build. This is the deadline. These are the standards.’ Everything you could think of,” he continued. “And essentially, TSMC is the exact opposite. They just say, ‘Build this.’ And I don’t get the blueprints. There’s no planning. They essentially assume everybody just knows how to do the job. But I can’t read your mind.”

“TSMC wants you to get the job done with as little amount of information and as fast as possible,” he added.

Given the funding TSMC received from the CHIPS Act, a discrimination lawsuit is the last thing the company needs, but it could provide further impetus for lawmakers to consider further bailout options for Intel.