May 15, 2002
WashTech News
Seattle, WA - After more than a decade of litigation, including legal wrangling over the past year regarding appropriate attorneys' fees, the landmark Vizcaino vs. Microsoft "permatemp" case has moved one step closer to a final settlement.
In a ruling issued today, the Ninth Circuit U.S. Court of Appeals in San Francisco denied an appeal filed last year that sought to reduce the attorneys' fees on behalf of two plaintiffs in the case.
The ruling upholds the April 2001 settlement agreement and fee approved by Seattle U.S. District Judge John C. Coughenour. Judge Coughenour's approval ratified an agreement worked out in December 2000 by attorneys representing the permatemps and attorneys for Microsoft.
"We are gratified that the Court of Appeals has accepted the historic settlement we have reached with Microsoft, including the award of reasonable attorneys' fees for our work on the case over the past 10 years," announced Stephen Strong, a partner with the plaintiffs' firm of Bendich, Stobaugh & Strong.
"This case," he added, "was brought to improve the situation for permatemps at Microsoft and to obtain compensation for thousands of employees."
Under the agreement, Microsoft agreed to pay approximately $97 million, including compensation to class members, attorneys' fees, and expenses of litigation. The settlement is the largest ever for a class-action permatemp case.
Over the past year, rumors have swirled about the status of the case and individual class-member compensation. Many former Microsoft permatemps have expressed confusion about whether they are in fact class members or not, whether settlement checks have already been issued, and whether they have been excluded from the class because of some inaction on their part.
"I am happy this step is at least done," said Paul Ray, who worked as contract video editor at Microsoft between 1990 and 1997. Ray says he thinks the attorneys' fees are "in general okay", but adds that he feels the "overall settlement was pretty low compared to actual damages."
Rebecca Hughes, who worked full-time at Microsoft from 1994 to 1997 as a "temp" content editor says she is delighted at the court's decision.
"It's high time for thousands of us to get at least partial compensation for being misclassified as 'temps' for so long," said Hughes. "And it's high time Bendich, Stobaugh, and Strong, who've been working for us effectively for free for over a decade, got paid."
Lawrence Schonbrun, the attorney who represented named plaintiff Donna Vizcaino in her challenge of the attorneys' fees, has made a career out of challenging class-action lawsuits. Deemed a "professional objector" by the plaintiffs' attorneys, Schonbrun argued that the award of $27 million in attorneys' fees was excessive.
However, the Court of Appeals upheld Judge Coughenour's findings and concluded:
The court found a number of factors that justified the attorneys' fees, including "exceptional" results for the class, the burden placed on plaintiffs' attorneys from 11 years of work without compensation, and the fact that the case impacts employers and workers nationwide by clarifying the law of temporary worker classification.
The case has received international attention since it was filed in 1992. The lawsuit challenged the widespread employer practice of paying workers through staffing agencies to avoid providing benefits. This practice expanded rapidly during the 1990s after the IRS cracked down on employers who were treating full-time employees as "independent contractors."
Bendich, Stobaugh & Strong filed the lawsuit in 1992 on
behalf of Microsoft workers they argued were mislabeled as employees of staffing firms and "independent contractors", when they were in fact "common-law" Microsoft employees. The lawsuit aimed to recover benefits, including the right to participate in the Microsoft Employee Stock Purchase Plan, for permatemps at Microsoft.
It is estimated that 8,000 to 12,000 class members could receive payments in the settlement. The amounts that class members receive will depend on when they worked at Microsoft, the duration of their "permatemp" status, and the total number of employees who file claims under the settlement.
More info:
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WashTech News: In The Courts |
WashTech News
Court Upholds Microsoft 'Permatemp' Settlement
By Mike BlainSeattle, WA - After more than a decade of litigation, including legal wrangling over the past year regarding appropriate attorneys' fees, the landmark Vizcaino vs. Microsoft "permatemp" case has moved one step closer to a final settlement.
In a ruling issued today, the Ninth Circuit U.S. Court of Appeals in San Francisco denied an appeal filed last year that sought to reduce the attorneys' fees on behalf of two plaintiffs in the case.
The ruling upholds the April 2001 settlement agreement and fee approved by Seattle U.S. District Judge John C. Coughenour. Judge Coughenour's approval ratified an agreement worked out in December 2000 by attorneys representing the permatemps and attorneys for Microsoft.
"We are gratified that the Court of Appeals has accepted the historic settlement we have reached with Microsoft, including the award of reasonable attorneys' fees for our work on the case over the past 10 years," announced Stephen Strong, a partner with the plaintiffs' firm of Bendich, Stobaugh & Strong.
"This case," he added, "was brought to improve the situation for permatemps at Microsoft and to obtain compensation for thousands of employees."
Under the agreement, Microsoft agreed to pay approximately $97 million, including compensation to class members, attorneys' fees, and expenses of litigation. The settlement is the largest ever for a class-action permatemp case.
Over the past year, rumors have swirled about the status of the case and individual class-member compensation. Many former Microsoft permatemps have expressed confusion about whether they are in fact class members or not, whether settlement checks have already been issued, and whether they have been excluded from the class because of some inaction on their part.
"I am happy this step is at least done," said Paul Ray, who worked as contract video editor at Microsoft between 1990 and 1997. Ray says he thinks the attorneys' fees are "in general okay", but adds that he feels the "overall settlement was pretty low compared to actual damages."
Rebecca Hughes, who worked full-time at Microsoft from 1994 to 1997 as a "temp" content editor says she is delighted at the court's decision.
"It's high time for thousands of us to get at least partial compensation for being misclassified as 'temps' for so long," said Hughes. "And it's high time Bendich, Stobaugh, and Strong, who've been working for us effectively for free for over a decade, got paid."
Lawrence Schonbrun, the attorney who represented named plaintiff Donna Vizcaino in her challenge of the attorneys' fees, has made a career out of challenging class-action lawsuits. Deemed a "professional objector" by the plaintiffs' attorneys, Schonbrun argued that the award of $27 million in attorneys' fees was excessive.
However, the Court of Appeals upheld Judge Coughenour's findings and concluded:
"We are satisfied that in this case, the district court subjected the application to the requisite scrutiny and did not abuse its discretion in determining a reasonable fee in light of the relevant circumstances of the case."
The court found a number of factors that justified the attorneys' fees, including "exceptional" results for the class, the burden placed on plaintiffs' attorneys from 11 years of work without compensation, and the fact that the case impacts employers and workers nationwide by clarifying the law of temporary worker classification.
The case has received international attention since it was filed in 1992. The lawsuit challenged the widespread employer practice of paying workers through staffing agencies to avoid providing benefits. This practice expanded rapidly during the 1990s after the IRS cracked down on employers who were treating full-time employees as "independent contractors."
Bendich, Stobaugh & Strong filed the lawsuit in 1992 on
behalf of Microsoft workers they argued were mislabeled as employees of staffing firms and "independent contractors", when they were in fact "common-law" Microsoft employees. The lawsuit aimed to recover benefits, including the right to participate in the Microsoft Employee Stock Purchase Plan, for permatemps at Microsoft.
It is estimated that 8,000 to 12,000 class members could receive payments in the settlement. The amounts that class members receive will depend on when they worked at Microsoft, the duration of their "permatemp" status, and the total number of employees who file claims under the settlement.
More info:
- The courts have appointed Rust Consulting, Inc. as the administrator of the Vizcaion v. Microsoft case settlement. Rust Consulting expects to send out claim forms in 2002. If you have not previously submitted a class member information form, or if you have new contact information, you should visit the Class Member Information Questionnaire on the Bendich, Stobaugh and Strong web site. If you have any questions, contact Rust Consulting @ 1-800-589-1425 or email Rust consulting@MSpermatemp@visi.com
- Text of 5/15/02 Ninth Circuit Vizcaino Ruling
- Notice of Settlement (PDF)
- Settlement Agreement (PDF)
Email Article
Talkback on Article
Dec 19, 2007, 9:41 pm
I received an email entitled "Legal Notice to Iowa Microsoft Users" on December 11, 2007, but the email was blank, and there was no further communication. The headers indicate the email came from Rust Consulting.
Jayne M., Cedar Rapids, IA
Jayne M., Cedar Rapids, IA
Oct 10, 2006, 2:45 pm
As a claimant in this case, I am unable to process the settlement check due to an expired ID that I am unable to renew at this time and a non-transfer clause on the check itself, preventing me from signing it over to someone who can cash it.
As of this time, the administrators of this case have offered only the suggestion that I use a check cashing service. They will not cash the check without ID either. This check is just worthless paper to me.
Richard Nicholson, Fort Worth, Texas, USA
Richard Nicholson, Fort Worth, Texas, USA