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Suit Raises Questions on Benefits for Temps

TIMES STAFF WRITER

Nine current and former temporary workers sued Atlantic Richfield Co. on Thursday, accusing the Los Angeles oil company of misclassifying employees to avoid paying benefits during the last 10 years--a type of workplace dispute that is increasingly finding its way to court.

The class-action lawsuit, filed in U.S. District Court in Los Angeles, seeks for the workers the same health and pension benefits given to Arco’s regular employees, who numbered 18,000 at the end of 1998. At least 100 and perhaps more than 1,500 “leased” or “contingent” workers may have been affected, said Brian Waid, a lawyer with Seattle firm Bendich, Stobaugh & Strong, which represents the plaintiffs.

An Arco spokeswoman declined to comment because the corporation had not yet reviewed the lawsuit.

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Corporations in recent years have turned more frequently to temporary workers to provide flexibility in the competitive global marketplace. But the use of long-term temporary workers--nicknamed “permatemps”--has been thrown into doubt by a federal appeals court ruling last month that Seattle-based Microsoft Corp. must extend stock options to employees hired through temporary staffing agencies.

“The concept of long-term temps has become really very dangerous,” said Larry J. Shapiro, publisher of the Tiburon-based California Employment Advisor newsletter.

“This is the next wave of the employment litigation explosion, because there are so many people who do business this way,” Shapiro said. “So many employers are sitting ducks.”

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The National Assn. of Temporary and Staffing Services, or NATSS, estimates that 3 million people are employed through temporary help agencies, up from slightly more than 1 million in 1990.

Nearly 3 out of 4 organizations use “alternative workers” to supplement their work forces, according to a survey released in January by the Society of Human Resources Management. The most common reason for using temporary workers, cited by 77% of respondents, was to meet business or workload fluctuations. Only 22% said they resorted to temp workers to contain costs from wages and benefits.

However, the population of long-term temporary workers is relatively small, said Max Lyons, an economist with the Employment Policy Foundation, a research group funded by business.

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A 1997 survey by the Bureau of Labor Statistics, Lyons said, found that about 12% of temporary workers had spent 24 months or longer in their then-current assignment. That equals about 150,000 workers, or about 0.1% of the nation’s work force, he said.

Overall, temporary workers represent about 2% of the work force, “which is a whole lot less than people think,” Lyons said.

Part of the problem stems from the legal definition of what constitutes an employee, said Ed Lenz, general counsel with the NATSS.

“Our concern is that the common-law rules don’t fit the realities of what the new workplace is,” Lenz said. “The issue is who supervises workers at the work site. We acknowledge that the client company usually does directly supervise the workers. . . but that should not be the controlling factor, in our view.”

In the Arco lawsuit, the nine workers contend that they are regular employees because Arco trained them, provided their work equipment and supplies, had them working continuously for years at Arco facilities and supervised their work. The plaintiffs, who all worked in Arco’s Alaskan operation, said they often worked alongside regular Arco employees performing identical tasks.

Several of the plaintiffs were paid during their years at Arco by a succession of three or four employee-leasing agencies, the suit stated.

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“That’s a pretty good indication that this is just a shell game,” said Waid, whose law firm won the potentially expensive ruling against Microsoft. Microsoft is appealing that decision. The law firm also is representing several lawyers who have sued Los Angeles County over a similar payroll setup.

“Arco has illegally denied us benefits for years,” said plaintiff Moira Casey, who worked in Arco’s Alaskan operations for 12 years until she was recently laid off. “Not only was I hired, trained and supervised by Arco employees, but when I was recently laid off I was replaced by a regular Arco employee, and I worked in positions that had previously been filled by regular Arco employees.”

The employees had petitioned Arco for benefits in 1998 but were denied, the lawsuit said.

Employers can in some cases legally exclude some workers from benefit plans, but the employers should review their benefits programs and contracts carefully to make sure they clearly detail who is covered and who is not, Shapiro of the newsletter said.

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