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Microsoft 'permatemp' checks finally arrive

Five years after the company's settlement with long-term temporary workers, ex-employees are finally seeing their funds.

Randy Alfred has been waiting for a check in the mail for five years. On Friday, his birthday, it finally arrived.

Alfred, a former copy editor at Microsoft's SF Sidewalk division, is one of thousands of erstwhile Microsoft temporary workers at the software giant now receiving a legal settlement that has been held up in court for years.

The case itself stretches all the way back to 1992, when long-term temporary workers, or "permatemps," as they later became known, alleged that they were unfairly being locked out of benefits such as discounted stock purchases enjoyed by the company's regular employees.

The dispute wound through courts all the way until December 2000, when the two sides reached a $97 million settlement agreement. But it took another near-five years before the details were worked out.

"This has been going on forever," said Alfred, a computer consultant who worked with SF Sidewalk between 1997 and 1999. "I'm glad I wasn't relying on it to pay the rent."

For Microsoft, the final distribution of the settlement funds--approved by a court late last month--means little from a financial perspective.

The company put its share of the funds into an escrow account shortly after the settlement was reached. But continuing disputes, including an appeal by workers challenging the $27 million attorneys' fees, and confusion over how the settlement would be taxed, kept the funds in limbo until this year.

The actual amount for each employee varies, from hundreds to potentially tens of thousands of dollars. A complicated formula takes as a base the amount that each employee could have invested in the company's discounted stock purchase plan, and then looks at how much the stock would have appreciated in a year.

Thus, people who were employees in the boom years, when Microsoft's stock was climbing fast, likely did better than employees during relatively flat years. The settlement covers any temporary workers who were employed for at least nine consecutive months at Microsoft between 1986 and 2000.

"When we reached that agreement, we were very pleased, as was the other side," said Microsoft spokesman Lou Gellos. "It has been resolved, and we're very happy they're finally getting their money."