| BUSINESSWEEK ONLINE : NOVEMBER 15, 1999 ISSUE | ||||||||
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| NEWS: ANALYSIS & COMMENTARY
Temp Wars: Why Microsoft May Cry Uncle A secret memo maps out a plan to make them full-timers Microsoft Corp. (MSFT) has made it clear that it's willing to go all the way to the U.S. Supreme Court to prove that its legions of temporary workers--many on the payroll for years--are employees of temp agencies, not the software giant. Microsoft was hauled into court over the issue in 1992 when a group of so-called perma-temps launched a class action in which they claimed that they were, in fact, full-time employees entitled to full benefits, including participation in Microsoft's lucrative stock-purchase plan. Microsoft won the first round, but then lost the next few in appeals. In September, it launched a last-ditch attempt to get the Supreme Court to reverse the ruling. But behind the scenes, Microsoft may be preparing for a defeat--laying plans to convert thousands of the 6,000 temps now on the payroll into full-fledged employees. In mid-October, as part of the discovery process in the class action, the permatemps' lawyers uncovered a two-page Microsoft presentation entitled simply ''The Plan.'' In this document, managers seem to be outlining a strategy for mass conversion of Microsoft temps who have been with the company for more than a year. POSTER CHILD. If adopted, the plan would offer thousands of temps the opportunity to become full-timers, presumably with full benefits. The memo, a copy of which was obtained by BUSINESS WEEK, explains why Microsoft may be considering a new line. It acknowledges that the current situation makes temps ''ripe for unionization.'' The Washington Alliance of Technology Workers (Wash-Tech), a fledgling union of Microsoft employees, had heard about the potential conversion because managers have discussed the possibility with some temps. Says WashTech organizer Marcus Courtney: ''Microsoft may want to move away from being the poster child of permatemps.'' Microsoft spokesman Jim Cullinan denies that the presentation represents the company's current policy. But, he adds: ''If temporary positions last longer than a year, we try to change them to permanent ones.'' Whether conversion is a new option or not, legal experts figure Microsoft should plan on being turned down by the Supreme Court. After all, the High Court rejected an earlier appeal in 1998. Then, last May, the U.S. Court of Appeals for the Ninth Circuit ruled for the second time against Microsoft, saying that workers on the payroll for more than a few months are common-law employees of Microsoft, even if they're also signed up with a temp agency. So all who qualify are entitled to participate in Microsoft's stock-purchase plan, the court ruled. Now, the company is returning to the Supreme Court. It is arguing that the Ninth Circuit interfered with the ability of district courts in general to administer class actions. Outside legal experts say the odds are against the high court hearing such a narrow argument. If it doesn't, Microsoft would face a difficult choice. It could fight a second suit plaintiffs filed last year, which argues that temps are now entitled to health care and other benefits extended to ''regular'' workers. But it would likely be a tough battle, given that Microsoft would probably already be including them in the stock plan as employees. ''Once you say they are your employees for some purposes, it's hard to maintain they're not for others,'' says David F. Stobaugh, a partner at plaintiff lawyers Bendich, Stobaugh & Strong in Seattle. So Microsoft seems to have concluded that it's time to lay plans for a truce. On Sept. 2, for instance, a manager in the Windows 2000 unit sent an e-mail to his group, which includes many temp workers, that was obtained by WashTech. He said managers were mapping out a long-term plan that ''includes the opening of a large number of Microsoft positions for (fiscal year 2000).'' Cullinan says the e-mail refers only to the Windows 2000 group, where Microsoft ''is preparing to move many workers to new jobs once that product ships.'' Microsoft may still decide against carrying out its plan. But if it keeps losing in court, hiring the permatemps may be the easiest way out. By Aaron Bernstein in Washington _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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