January 09, 2001, 10:08 AM — MICROSOFT WILL PAY a $97 million settlement to approximately 10,000 temporary employees included in a 1992 class-action lawsuit focused on "permatemps" against the Redmond, Wash.-based company.
The suit against Microsoft challenged the "permatemp" practice, whereby an employer pays a worker through a temporary employment agency to avoid paying benefits, such as providing health care or a stock option plan.
"The first and foremost goal was that permatemp would come to an end, and that happened," said Brian Waid, one of three attorneys on the case for the Seattle law firm of Bendich Stobaugh & Strong P.C. "We've been in settlement negotiations for two years. We are extraordinarily happy with the result. Microsoft is a leading company. They are a worthy adversary, but they finally accepted that permatemping had to end."
In 1992, the lawsuit was brought forward to recover benefits, including the right to participate in Microsoft's Employee Stock Purchase Plan. The settlement includes compensation for all lawsuit members, attorney's fees, and litigation.
Microsoft has made three changes in the use of permatemp staff, according to Matt Pilla, a Microsoft representative. Management training is now conducted to help managers determine whether a position should be a regular assignment or temporary. In addition, Microsoft now uses only temporary staffing agencies, which seek to provide quality benefits, he said.
Finally, the company now limits the length of temporary assignments to 12 months. After the 12-month period is up, a temporary worker must wait 100 days before the next assignment at Microsoft, Pilla said. The average temporary assignment is 10 months, he said. Redmond, Wash.-based Microsoft has about 5,000 to 6,000 permatemps at any one time, he said.
A copy of the settlement can be viewed at www.bs-s.com.
James Evans is a Boston correspondent for the IDG News Service, an InfoWorld affiliate.
