Microsoft settles permatemps lawsuits for $97 million

By PEGGY ANDERSEN

Associated Press

SEATTLE — Microsoft agreed to pay $97 million to settle federal lawsuits filed on behalf of thousands of long-term temporary workers, who often received lower pay and fewer benefits than their permanent counterparts.

The settlement, which won preliminary approval Tuesday from U.S. District Judge John Coughenour, included employment-policy changes made since 1997 to reduce the disparities.

Between 8,000 and 12,000 current and former employees who worked at least 750 hours over at least nine months are expected to receive settlement payments, said plaintiffs’ lawyer Stephen Strong.

Many of the so-called permatemps, who had been at the company for as long as 14 years, have been converted to so-called regular jobs since the lawsuits were filed in 1992, Strong said.

A range of benefits was at issue, but the payments will be determined using a formula based on how much discounted stock was purchased by full-time workers making equivalent salaries, Strong said.

Company spokesman Dan Leach said some workers prefer temporary status, finding more flexibility, better pay or greater opportunity.

"Lots of folks are making that choice," Leach said Tuesday.

Former two-year temp Marcus Courtney conceded that some might like the setup, but "it’s not the majority."

"How many stories have you ever seen about high-tech contractors retiring at 35 because they made millions of dollars?" asked Courtney, who co-founded the pro-union Washington Alliance of Technology Workers in 1998.

Lucrative stock-option opportunities were not at issue in the lawsuit.

Microsoft employs 42,000 people worldwide — about half in the Puget Sound area — and has 5,000 to 6,000 temporary staff or contingency workers at any given time.

Many work as independent contractors or as employees of more than a dozen temporary help agencies. "Some are truly temporary employees and always have been," Strong said.

In the mid-1990s, Microsoft adjusted the guidelines that managers use to determine if an assignment should go to a permanent or temporary worker, Microsoft spokesman Matt Pilla said.

Microsoft also now favors temporary-staffing agencies that offer better benefits, he said, and limits the length of temporary assignments to 12 months.

The company announced in February that it would set the one-year limit for temp workers and require a 100-day break between assignments. The new policy took effect in July.