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.