Date: Fri, 11 Oct 1996
From: Philip Kraft <[EMAIL PROTECTED]>
BENEFIT RULING COULD HAVE WIDE IMPACT
By Del Jones and Julie Schmit
An appeals court ruling in Seattle against Microsoft
for treating employees as independent contractors is
sending shivers through the high-tech industry and
beyond.
If it stands, last week's 9th U.S. Circuit Court of
Appeals decision will let hundreds, maybe thousands, of
Microsoft workers collect back 401(k) retirement
benefits and stock worth $133 a share that employees
bought for $5 a share in 1987.
The ramifications are enormous. By opening the door to
back benefits, contractors found to be employees in the
future could sue companies for medical bills for which
they would have had insurance.
They could sue for discrimination, sexual harassment
and other protections available only to employees, says
Washington lawyer Jay Krupin.
It could undermine the growing corporate strategy of
using temporary and contract workers to grow or shrink
workforces depending on demand. More recently, contract
workers have been hired by companies to buffer against
legislation such as the Family and Medical Leave and
the Americans with Disabilities acts, which apply to
employees but not contractors.
In the high-tech industry, temporary and contract
workers can typically make up 10% to 12% of a company's
workforce.
Contract workers, to be legal, must be their own bosses
by bidding on jobs and working for multiple companies.
"Increasingly, you have a smaller and smaller core of
true employees," says Amy Dean, chief executive officer
of the South Bay AFL-CIO Labor Council in California.
There are plenty of jobs, says high-tech worker
Richelle Noroyan of Santa Cruz, Calif., but to get one,
"You have to go through an agency" and get no benefits.
Microsoft, which likely will appeal, says the ruling
applies to fewer than 1,000 workers, but still would
cost the company millions of dollars. Plaintiff lawyer
David Stobaugh says the class-action lawsuit applies to
thousands of more workers through the present.
