We recently moved to Office 365 in our office. We have a proxy server running that everything goes through. Our Mac users are having problems with Outlook 2011 authenticating through the proxy. Once Outlook has opened and connected, after a few minutes it will disconnect from the Office 365 Exchange server. The usual error message is "The server for account "my company" returned the error "Logon failure: unknown username or bad password." Your username/password or security settings may be incorrect. Would you like to try re-entering your password? It will not reconnect unless you open a browser to force a re-authentication to the proxy server.

On Win machines adding a .pac file to the auto proxy settings solves the any proxy issues. Adding it to the Mac has not solved the problem.

The user accounts work fine on Mac's outside the office without a proxy to go through, and they work fine on Windows machines in the office.