Vizcaino

Opinion by Judge FERNANDEZ; Partial Concurrence and Partial Dissent by Judge FLETCHER; Partial Concurrence and Partial Dissent by Judge O’SCANNLAIN.

Donna Vizcaino, Jon R. Waite, Mark Stout, Geoffrey Culbert, Lesley Stuart, Thomas Morgan, Elizabeth Spokoiny, and Larry Spo-koiny brought this action on behalf of themselves and a court-certified class (all are hereafter collectively referred to as “the Workers”). They sued Microsoft Corporation and its various pension and welfare plans, including its Savings Plus Plan (SPP), and sought a determination that they were entitled to participate in the plan benefits because those benefits were available to Microsoft’s common law employees. The district court granted summary judgment against the Workers, and they appealed the determinations that they were not entitled to participate in the SPP or in the Employee Stock Purchase Plan (ESPP). We reversed the district court because we decided that the Workers were common law employees who were not properly excluded from participation in those plans. See Vizcaino v. Microsoft Corp., 97 F.3d 1187 (9th Cir.1996) (Vizcaino I). However, we then decided to rehear the matter en banc, and we now agree…

with whom HUG, Chief Judge, and PREGERSON, MICHAEL DALY HAWKINS and THOMAS, Circuit Judges, join, concurring in part and dissenting in part:

We concur in the substance of Judge Fernandez’ opinion except that we would not remand the issue of eligibility to participate in the SPP to the Plan Administrator and would hold that the Workers are eligible to participate. Remand is inappropriate and further unnecessary in that we conclude that interpretation of the phrase “on the United States payroll of the employer” is not required.

In its denial of the Workers’ claim, the administrative panel convened by the Plan Administrator stated:

We agree with Judge Fernandez that these determinations were arbitrary and capricious. On appeal, as Judge Fernandez has also properly noted, the Plan abandoned all of its prior positions in favor of a new tack: that the Workers are not eligible for SPP benefits based on a construction of the phrase “on the United States payroll of the employer.” Our disagreement with Judge Fernandez, therefore, concerns (1) whether the Plan can properly raise a theory on judicial review not raised in the administrative process, and (2) if a new theory can be raised,…

joined by CYNTHIA HOLCOMB HALL and T.G. NELSON, Circuit Judges, concurring in part and dissenting in part:

I respectfully dissent from all but Part IIA of the court’s opinion because Microsoft and the plaintiffs never formed a valid contract under Washington law for the benefits now claimed. I concur in the result of Part II-A of the court’s opinion but not in its analysis.

I

I do not disagree with the court’s statement of facts, but it has failed to mention some and may leave a mistaken impression of others. Thus, I suggest that the following additional facts from the record be taken into account.

The plaintiffs were temporary “freelancers” for Microsoft. Instead of calling them by this label-which was ubiquitously used within the Microsoft community and by the plaintiffs themselves-the court styles the plaintiffs as “workers.” It then engages in a long discussion of why they were in fact “common law employees” of Microsoft. Both labels may be true-the plaintiffs did work, and Microsoft has conceded that the plaintiffs satisfy the definition of common law employees for some purposes. Neither of these labels are relevant to the question before us, however, and both are…