Thoroughly documenting workers’ job duties is a good approach to determining whether they should be treated as regular employees. During a period of rapid growth, Microsoft hired thousands of workers through local personnel agencies and treated them as “temps” ---paying, them no company benefits and clearly stating that full-time employment in the future was not guaranteed. The temps (who wore orange badges) stayed around so long that the acquired the nickname
“permatemps.” Eventually, the permatemps filed a class action lawsuit. They claimed they had been denied benefits (including the opportunity to purchase company stock) that the were entitled to receive. After eight years of legal battles, the courts ruled in favor of Microsoft’s permatemps, agreeing that the employees did not forfeit the rights ordinarily granted to regular employees (who wore blue badges) just because they had signed a waiver stating that they understood their “temporary” status. The court ruled that they should be classified as regular employees and were entitled to back pay and the value of stocks they had not received. Microsoft was ordered to reimburse these workers at an estimated cast 97 million. In addition to the financial costs, Microsoft’s image as an employer of choice took a beating in the public press. Today, Microsoft continues to employ several thousand independent contractors, but now the company is much more careful to ensure that these contractors are truly temporary.