Subject: BL-Newsletter: Ninth Circuit Decision re Microsoft "Contractors"
Date: Mon, 28 Jul 1997 13:24:26 -0500

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EASY LAY-UP SHOT AHEAD FOR MICROSOFT'S 401(k) PLAN
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In Vizcaino v. Microsoft (July 24, 1997), the Ninth Circuit en
banc panel has affirmed that Microsoft workers were employees,
not independent contractors and hence denial of coverage under
Microsoft's 401(k) plan (which covered only "employees . . . on
the United States payroll") was an abuse of discretion to the
extent that the plan administrator's decision was based on the
workers' alleged status as independent contractors rather than
employees.

But the court has "remanded" to the plan administrator the
ability to construe and apply the phrase "on the United States
payroll" found in the plan's eligibility provisions.

Because the court also noted that the workers had been paid via
invoices submitted to Microsoft's accounts payable department
rather than its payroll department, it seems likely that the
plan's administrator will be able to survive a later court
challenge if it decides the workers were employees but were
ineligible becuase they were not "on the United States
payroll."  Full text of the opinion is online on BenefitsLink(tm)!
See:

   http://www.benefitslink.com/cases/microsoft.html

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