SEATTLE — Microsoft has reached a $97 million settlement of federal lawsuits from temporary workers who challenged the software giant's employment practices, which once allowed employees to be classified as temporary for as long as 14 years, a plaintiffs' lawyer said.
Between 8,000 and 12,000 current and former employees are expected to receive payments under the settlement, plaintiffs' attorney Stephen Strong said Tuesday. "Many have been converted to so-called regular jobs" since the lawsuits were filed in 1992, he said.
The settlement, worked out with assistance from U.S. District Judge William Dwyer, was given preliminary approval by Judge John Coughenour on Tuesday.
"The case was brought to achieve two goals: to challenge the two-tier employment at Microsoft and to recover benefits for employees. We feel we achieved those to a large degree," Strong said.
While a range of benefits were at issue, "the one that we won on was exclusion from the employee stock-purchase plan at Microsoft," he said.
The awards — for those employed at least 750 hours over at least nine months — will be determined using a formula based on actual purchases of discounted stock by full-time workers making equivalent salaries.
At any given time, Microsoft employs 5,000 to 6,000 temporary staff or contigency workers, company spokesman Matt Pilla said. Microsoft employs 42,000 people worldwide — about 21,000 of them in the Puget Sound area.
"We're pleased to reach an agreement that's acceptable to all sides and which resolves the litigation," Pilla said. "Microsoft as always has been an excellent place to work and we value every individual who contributes to our products and services."
Microsoft is "constantly evaluating employee policies to ensure the company continues to be a great place to work," he said.
Changes made since the mid-1990s "are such that the complaint against us would not have been filed if they had been in place. We're confident of that."
Company spokesman Dan Leach indicated there are some temp workers who prefer that arrangement, finding more flexibility and opportunity in short-term employment. In some cases, he said, the pay is better.
"Lots of folks are making that choice," Leach said.
Former two-year temp Marcus Courtney said most temps are hoping for full-time employment and would prefer it. And he dismissed the notion that some are better paid than full-time Microsoft employees.
"How many stories have you ever seen about high-tech contractors retiring at 35 because they made millions of dollars?" he asked.
The settlement was"obviously a very major victory for long-term temp workers at Microsoft," said Courtney, who co-founded the pro-union Washington Alliance of Technology Workers — backed by the Communication Workers of America — in 1998. WashTech has attempted to organize workers at Microsoft and other high-technology companies.
"Microsoft is doing the right thing by deciding to settle this thing ... so people can get closure," Courtney said.
In the mid-1990s, Pilla said, Microsoft adjusted the guidelines managers use to determine if an assignment should be a regular position or one to assign to a temporary.
Microsoft also has changed the way it selects temporary-staffing agencies to favor companies that offer better benefits, he said, and has limited the length of temporary assignments to 12 months.
Under the old policies, some temporary workers were at the company as long as 14 years, plantiffs' attorney David Stobaugh said."That's consecutive employment," he said. Some temps were at Microsoft longer but"they have some gaps."
The settlement agreement noted changes made at Microsoft since 1997.
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.
More than a third of Microsoft's new hires over the past three years have been former temporary workers, the company said at that time.