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Microsoft temps sue for benefits

November 23, 1998
Web posted at: 11:30 AM EST

by Tom Diederich

(IDG) -- A law firm representing 10 current and former contract workers at Microsoft Corp. filed a lawsuit in U.S. District Court on Tuesday against the software giant, seeking damages and full-time employee benefits for its plaintiffs and thousands of other "misclassified" temporary employees.

The 10 plaintiffs seek class-action status because they want to include some 6,000 current full-time Microsoft employees who have been "misclassified as nonemployees" under "various erroneous labels" and denied company benefits.

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An attorney for the plaintiffs, David Stobaugh, said the action builds upon a 1992 class-action lawsuit that launched the Vizcaino v. Microsoft case, which is still open. The U.S. Ninth Circuit Court of Appeals ruled that workers in this class of so-called "perma-temps" are in fact "common-law employees" of Microsoft. In 1997, the court ordered the company to include these workers in its corporate savings plan.

Last July, however, a U.S. District Court judge modified the original class action to remove all employees hired by Microsoft after April 1, 1990. This latest lawsuit was filed by some of those employees.

Stobaugh said the new class-action lawsuit gives his plaintiffs, who have all spent at least three years at Microsoft, an opportunity to raise benefits issues excluded in the Vizcaino case, such as company-paid health insurance -- "which Microsoft denies to approximately 30% of its workforce," he said.

The employees either receive their paychecks from temporary staffing agencies or are paid as independent contractors for jobs that include graphic artist, program manager, programmer or editor.

"It's very odd. Some employees at Microsoft have become extremely wealthy through their stock-option plans and that soft of thing, and then they have another category of their employees -- which is about 30% to 35% -- who don't even get health care," Stobaugh said.

"We're seeking damages for the wrongful exclusion of the benefits plan; we're seeking an injunction that requires them to start classifying people properly and allowing employees to participate in the employee stock-purchase plans," Stobaugh said. "In our view, they can't continue to operate the way they're operating."

A Microsoft spokeswoman said the company hasn't seen a copy of the lawsuit and therefore couldn't comment. However, she did offer the company's view on temporary employees.

"Microsoft basically uses contingent workers to accommodate the need for a flexible workforce that would arise based on seasonal or cyclical projects -- like a product launch," said Microsoft spokeswoman Heidi Rothauser. "They also use contingent workers to meet the need of specific projects that may require unique skills that may not be needed at the company on a long-term basis, such as for pilot projects."

Stobaugh questioned Microsoft's use of the word "project" in its explanation of temporary workers. "It would be like The Boeing Co. calling the 747 its project," he said. "Well, of course it is a project for Boeing, but that's what they do -- they make airplanes. And it's the same with Microsoft."

Although she wouldn't say how many temps were currently on the job, Rothauser said that 70% of them have been there less than a year, another 25% less than two years and the remaining 5% more than two years.

"There are something like 3,000 open positions at the company right now, and the temporary agency employees are certainly able to apply for any position they feel qualified for," Rothauser said. "And in many cases, they have an edge because they're familiar with the work environment and have had that first-hand knowledge."

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