Vizcaino

Opinion by Judge REINHARDT; Dissent by Judge TROTT.

Large corporations have increasingly adopted the practice of hiring temporary employees or independent contractors as a means of avoiding payment of employee benefits, and thereby increasing their profits. This practice has understandably led to a number of problems, legal and otherwise. One of the legal issues that sometimes arises is exemplified by this lawsuit. The named plaintiffs, who were classified by Microsoft as independent contractors, seek to strip that label of its protective covering and to obtain for themselves certain benefits that the company provided to all of its regular or permanent employees. After certifying the named plaintiffs as representatives of a class of “common-law employees,” the district court granted summary judgment to Microsoft on all counts. The named plaintiffs and the class they represent now appeal as to two of their claims: a) the claim, made pursuant to section 502(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132 (a), that they are entitled to savings benefits under Microsoft’s Savings Plus Plan (SPP); and b) the claim, made pursuant to Washington state law, that…

dissenting:

I

The Savings Plus Plan

Microsoft has a payroll department, and it has a separate accounts payable department. Because these plaintiffs were regarded both by Microsoft and by themselves as independent contractors or freelancers, Microsoft did not budget or pay for them through the payroll department, but through the accounts payable department. This commonplace distinction is fatal to the plaintiff’s request for Savings Plus Plan (“SPP”) benefits because to be eligible for these benefits, they have to have been on the employer’s “payroll.” The Plan itself so states.

As freelancers, the plaintiffs worked for Microsoft with the clear understanding that they were not entitled to the benefits they now seek. They knew Microsoft paid them based on the submission of invoices and out of accounts payable. Nevertheless, they now contend-without a foot to stand on-that they were indeed on Microsoft’s “payroll” and thus eligible for SPP benefits. In my reading of this record, they were not on Microsoft’s “payroll,” period. I agree with the district court’s analysis. All this may seem formalistic to the casual reader, but it was an important distinction to Microsoft, and to…