Microsoft, Caldera Settle Lawsuit

Microsoft Corp. and Caldera Inc. on Monday settled a $1.6-billion private antitrust lawsuit in which the world’s largest software maker was accused of using monopoly power to crush a rival computer operating system. Terms of the settlement weren’t disclosed.

Separately, the Supreme Court refused to hear Microsoft’s appeal of a decision that said more than 10,000 additional workers probably are eligible for the company’s discounted stock-purchase plan.

For the second time in two years, the nation’s highest court refused to get involved in a long-running dispute over the rights of workers classified as independent contractors or temps to demand fringe benefits traditionally reserved for employees.

The case could cost Microsoft tens of millions of dollars or more. Although the company still can seek exclusion of particular people, a federal appeals court earlier this year created a legal presumption that the class-action case includes thousands of past and current workers. Microsoft wanted all but a few hundred workers to proceed separately.

The dispute has received close attention from information-technology companies and others that rely heavily on temporary workers and independent contractors. US West Inc., Atlantic Richfield Co. and Time Warner Inc. face similar lawsuits.

The Caldera settlement will result in a one-time charge of 3 cents per share in the quarter that ends March 31, Microsoft said. Based on that charge multiplied by Microsoft’s 5.16 billion outstanding shares as of October, the settlement will cost Microsoft at least $154 million.

The settlement, which was announced after regular trading closed, comes just weeks before a jury trial was scheduled to begin, on Feb. 1. Caldera, a closely held software company based in Orem, Utah, had accused Microsoft of anticompetitive actions in the late 1980s that kept Caldera’s DR DOS operating system off the market. DR DOS was a potential competitor to Microsoft’s MS-DOS system.

“There was pressure to get it resolved or we were going to go the whole way,” Caldera Chief Executive Bryan Sparks said. Sparks said the sides concluded settlement talks Friday.

The resolution of the suit permits Microsoft to focus on business rather than litigation, the company said. “We are pleased to put this issue behind us,” said Microsoft in-house attorney Tom Burt.

In the other case, a Microsoft spokesman said the company was “disappointed” by the Supreme Court’s decision, which returns the case to a federal trial judge to determine exactly how much the company owes.

“This case has been moving forward under case management, and that will continue,” spokesman Dan Leach said.

Shares of Microsoft, based in Redmond, Wash., closed up 81 cents at $112.25 on Nasdaq.