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Tuesday, 12 December, 2000, 21:47 GMT
Microsoft settles 'permatemp' case
Microsoft chairman Bill Gates
Some 8,000-12,000 people might be in line for payouts from Microsoft
Microsoft is to pay $97m to settle a long-standing legal case brought by thousands of temporary workers who claimed they had been denied benefits while working at the software giant.

About 8,000-12,000 people who worked for Microsoft after December 1986 could be eligible for payments in what is believed to be the largest

The settlement will not have a material impact on our results

ever settlement in a case of this type, the plaintiffs' law firm Bendich, Stobaugh & Strong said in a statement.

The so-called "permatemp" case revolved around Microsoft's practice of hiring long-term workers through temp agencies, allegedly so it could escape paying pensions, health care and stock options.

The case had been filed in 1992.

Legal uncertainties

The payout was not expected to damage the financial performance of Microsoft, which despite recent heavy falls in tech shares, remains among the world's biggest listed companies.

"The settlement will not have a material impact on our results," Microsoft spokesman Matt Pilla said.

The Redmond, Washington-based company has 42,000 employees worldwide and 5,000-6,000 temporary workers on top of that, Mr Pilla said.

Settlement of the case removes one more of the legal uncertainties hanging over the firm.

The most far-reaching concerns the order by a federal judge - which Microsoft is appealing - to break the company in two on anti-trust grounds.

Microsoft is also fighting class-action suits in several states - in light of the federal ruling - brought by consumers claiming they have been overcharged for the Windows operating system.

The combination of the legal cases and weaker investor sentiment towards the tech sector as a whole has driven Microsoft shares down by about two-thirds since the record high touched late last year.

Recent policy changes

The "permatemp" settlement praised Microsoft for recent changes to company policy that had entailed the hiring since 1997 of some 3,000 former permatemps as workers with full benefits.

Microsoft was also hiring workers from temp agencies that offered better benefits and limiting the length of temp assignments to 12 months, with 100 days required before the same worker might be re-hired, Mr Pilla said.

"This case was brought to change the system at Microsoft and to obtain some compensation for this practice," lawyers David Stobaugh and Stephen Strong said in a statement.

"We believe this case has achieved its goals."

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