Microsoft Loses Ruling in Freelance Case

Hundreds of Microsoft Corp. workers improperly classified as independent contractors may have a right to participate in two of the company’s benefit programs, a federal appeals court said. The 11-judge panel of the U.S. 9th Circuit Court of Appeals reaffirmed part of a decision made in October by three of its members. The workers had been hired as independent contractors or freelancers by Microsoft’s international division between 1987 and 1990 and not paid overtime. But the Internal Revenue Service ruled in 1990 that the company had to treat the workers as employees for tax purposes. Microsoft accepted the ruling but balked at allowing the workers to participate in the employee stock purchase program, which allowed them to buy Microsoft stock at 15% below the market price, and 401(k) deferred-salary plans. The appeals court said the workers were eligible for the stock purchase program, but the court sent the 401(k) issue back to District Court with instructions to return it to the Microsoft pension plan administrator for further review, said company spokesman Mark Murray in Seattle. He said the company is reviewing its legal options.