January 27, 1998 in Nation/World

Microsoft Loses Legal Fight Over Temporary Workers Supreme Court Lets Stand A Ruling That Could Cost Company Millions In Benefits

Danny Westneat The Seattle Times
 

Microsoft lost another legal battle Monday as the U.S. Supreme Court let stand a ruling that could force the company to pay millions of dollars in benefits to temporary workers.

The Supreme Court refused to hear the case, a decision that effectively upholds a July ruling by a lower court that a group of freelance workers improperly were denied benefits by Microsoft between 1987 and 1990.

The workers have argued in a class-action lawsuit that they perform the same duties as permanent employees but are denied many basic benefits.

Specifically, the 9th Circuit Court of Appeals in San Francisco ruled in July that Microsoft should have allowed the freelancers to participate in a stock-purchase plan in which employees can buy stock at a 15 percent discount. This is not the same as a stock-option plan. Rather, it allows employees to set aside part of their paychecks for six months; after that time, they can buy stock at a discount to the market price. Historically, the stock-purchase program has been one of the company’s best benefits because the stock price has risen so fast.

The company has not tallied exactly how much stock it would have to award contract workers, but earlier legal documents suggest it would run into the millions of dollars in value.

Lawyers for the workers contend the ruling applies to as many as 2,000 of the estimated 5,000 temporary or contract workers at the company. Microsoft contends the case applies only to 800 workers hired between 1987 and 1990.

U.S. District Judge Carolyn Dimmick in Seattle will decide by Feb. 16 which of these views is correct.

Microsoft spokesman Mark Murray said the company was disappointed by the ruling.

He said the company typically pays contract and temporary workers a higher hourly rate than comparable permanent employees because of an acknowledgment that they must buy many of their own benefits.


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