Microsoft opposes U.S. labor board ruling
on contract worker rights
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[June 16, 2016]
By Deborah M. Todd and Robert Iafolla
(Reuters) - Microsoft Corp has asked a
federal court to throw out a ruling by a U.S. labor board extending the
responsibility of companies for contract workers, arguing that the case
would have big implications for the technology company.
An August 2015 decision by the National Labor Relations Board
expanded the definition of a "joint employer", which could require
more companies to bargain with and have liability for workers hired
by contractors.
The decision expanded the test for joint employment beyond whether a
company had “direct and immediate” control over employment
conditions of another company’s workers, to consider indirect or
unexercised control. The case is now before the U.S. Court of
Appeals for the D.C. Circuit.
Microsoft and industry group HR Policy Association submitted a joint
brief on Tuesday opposing the NLRB ruling in a case involving
California waste management company Browning-Ferris Industries, a
subsidiary of Republic Services Inc.
In its brief Microsoft said the 2015 ruling was too broad and the
decision would discourage Microsoft and others from directing
contractors to provide benefits to their employees, for fear the
directive would make Microsoft a joint employer under the new
standard.
Business groups say the ruling has the potential to disrupt a range
of business-to-business relationships, including those that
companies have with vendors, staffing agencies, subcontractors and
subsidiaries, as well as franchisees.
Silicon Valley companies frequently use contract workers for tasks
from security to writing software.
Microsoft had nearly 113,000 employees at the end of last year, it
said. A spokeswoman declined to say how many temporary and contract
workers it employed, but the Seattle Times quoted an unnamed source
as saying there were 81,000 at one point in 2015.
In the labor board's 2015 ruling, it said Browning-Ferris was a
joint employer of workers hired through a staffing agency at a
recycling facility and had to negotiate with workers.
Browning-Ferris has said the U.S. labor board standard for "joint
employment" is so broad and vague that it makes it impossible for
employers to structure their business relationships with
contractors.
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A Microsoft logo is seen in Los Angeles, California, U.S. June 14,
2016. REUTERS/Lucy Nicholson
Microsoft has been praised by President Barack Obama for restricting
its work contracts to suppliers who give employees at least 15 days
of paid leave annually, part of its so-called Corporate Social
Responsibility, or CSR, policy.
"Companies with existing CSR initiatives now have a strong incentive
to terminate them, and others considering such policies will be more
likely to table their plans," Microsoft said of the consequences of
the 2015 ruling.
Some labor law experts told Reuters that such corporate social
responsibility policies calling for minimum employee benefits are
unlikely to make companies a joint employer under the NLRB’s ruling
in Browning-Ferris.
“The board’s decision could use some clarification but does not
jeopardize a company’s corporate responsibility policy for its
vendors and suppliers, providing Microsoft or other brands do not
control or purport to control day-to-day labor and personnel
decisions of the suppliers,” said Samuel Estreicher, director of New
York University’s Center for Labor and Employment Law.
In any event, Microsoft argued, the court should make clear that
such CSR plans did not make a company a joint employer.
An NLRB spokesman was not immediately available for comment.
(Editing by Peter Henderson and Andrew Hay)
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