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MS wants another hearing

Microsoft says it will ask the U.S. Court of Appeals to rehear its case over 401(k) and stock purchase benefits for temporary and contract workers.

Microsoft (MSFT) today said it will ask the U.S. Court of Appeals to rehear its case over 401(k) and stock purchase benefits for temporary and contract workers.

The Ninth U.S. Circuit Court of Appeals in San Francisco earlier this month ruled that Microsoft's temporary work force were entitled to such benefits, a decision the software giant says will require millions of dollars in payment to hundreds of employees.

"We are confident this recent decision is not going to be the last word in the case," said Mark Murray, a Microsoft spokesman. He added that Microsoft considers the case to apply to workers between 1987, when the case was filed, through 1990. The plaintiffs, however, argue the case covers current employees as well.

The software giant faces a class-action lawsuit from workers who allege that the company is required to supply them with retirement and stock benefits. Microsoft had prevailed in an earlier ruling by a U.S. District Court, but when plaintiffs appealed that decision, the Ninth U.S. Circuit Court of Appeals said contract and temporary workers were indeed entitled to these benefits.

"Our clients were integrated into Microsoft's work force," said David Stobaugh, an attorney with law firm Bendich, Stobaugh, Strong in Seattle, who is handling the lawsuit. "They were actually treated like common-law employees."

Stobaugh alleges that some plaintiffs in the suit either had or have worked for the company for as long as four years.

Microsoft, in court documents, estimates that the class-action case could affect hundreds of current and former employees and cost the company millions of dollars in settlements. Stobaugh, however, estimates that the number of workers could be in the thousands.

"We believe we have treated and continue to treat all employees in a fair and equitable manner," rebutted Murray. He said he could not comment on what future impact the case might have on earnings if the new ruling stands.

Microsoft has filed a motion to extend the suit's timetable to review the case and may ask for the full Ninth Circuit Court of Appeals to hear the case. In the recent ruling, only three of the justices heard the case.

In order for the full court to hear the case, it must be of "exceptional" importance to public interest or the case has to be in conflict with an earlier appeals court decision.

"We don't anticipate that it will go to retrial," Stobaugh said. "Microsoft in the past has said that they don't consider this an extraordinary case."

Murray said that the use of temporary and contract workers is common in the software business. He added that the appeals court ruling may have a wide-ranging affect on the industry.

William Shaw, chairman and chief executive of Volt Information, a firm that specializes in providing contract workers, noted that the use of temporary workers is expanding in all industries as companies seek to cut costs with a smaller work force.

Microsoft has 10,000 to 15,000 permanent employees in the United States. But figures on the number of temporary and contract workers was not immediately available, Murray said.