Thursday, October 5, 2000

By DAN RICHMAN
SEATTLE POST-INTELLIGENCER REPORTER

Microsoft Corp. was sued yesterday in a federal class action charging it routinely discriminates against African Americans and women.

The suit, filed in the Seattle courtroom of U.S. District Judge Marsha Pechman, seeks "probably tens or hundreds of millions in damages for lost wages and benefits" and an injunction against further discrimination, said Steve Toll, the Cohen, Milstein, Hausfeld & Toll attorney managing the suit.

"Basically, Microsoft set up a subjective evaluation system where white managers are rating employees not on merit but on their own biases, and this has been going on for years," Toll said.

"People sue people for all sorts of reasons," Microsoft spokesman Matt Pilla said. "We don't tolerate discrimination of any kind at this company; we actively recruit, train and promote women and minority employees; and we're committed to treating all our employees fairly."

The suit, Donaldson vs. Microsoft, says the company has a pattern of paying smaller salaries, bonuses and stock options to black and female workers than to white males doing the same work. It says Microsoft promotes white men rather than better-qualified blacks and women.

And, the suit says, Microsoft has retaliated against black and female employees who have complained about this discrimination.

The only named plaintiff in the suit, Monique Donaldson, is a black Washington resident who worked for Microsoft in an unspecified capacity between 1992 and 1996, and then as a program manager at the company's MSN Operations Division between 1998 and May 2000.

But Toll said as many as 400 African Americans and 4,500 female employees in this country may have been affected by the discrimination and could join the class of plaintiffs.

Microsoft has 20 days to respond to the suit.

Toll's firm, which has four attorneys here and about 30 in Washington, D.C., is a formidable opponent.

Cohen, Milstein sued The Boeing Co. for racial and sexual discrimination, recently settling the race case for $15 million, Toll said. It was the principal firm involved in the race-discrimination suit against Texaco in 1997, which resulted in a $176 million payment.

The firm spearheaded the Swiss Banks Holocaust litigation, which settled for $1.25 billion, and the Nazi slave-labor litigation, which settled for $5.2 billion. And it is among the firms behind private antitrust actions against Microsoft in Baltimore.

In cases such as these, plaintiffs' attorneys get nothing if they lose. In this federal district, they get 25 percent of any judgment they win.

"Some people don't think much of plaintiffs' firms. You get called shakedown artists," Toll acknowledged. "But believe me, we don't file suits thinking someone is going to fold up. We don't pick companies because they're in a weakened state. You evaluate the cases carefully, especially against Microsoft, or you're stupid. They're going to defend this vigorously."

Microsoft's Pilla said minorities make up 22 percent of its domestic work force and women make up 26 percent.

"Those numbers are too low, in our opinion," he said.

The company "aggressively targets universities to recruit people from a variety of backgrounds," he said. It recently hired a director of diversity, Santiago Rodriguez, who was out of the country yesterday and unavailable for comment.

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