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Microsoft Policy May Foreshadow Shifts in Employment Relationship

    Client Alerts
  • June 17, 2022

Earlier this month, Microsoft announced three major changes to its employment practices for U.S. workers. First, Microsoft will no longer use or attempt to enforce non-competition covenants with its workers. Second, the company will disclose salary ranges for all job postings. Finally, Microsoft will no longer require non-disclosure clauses in settlement and separation agreements entered into with its employees.

All three of these changes address policy concerns recently raised concerning U.S. workers. Microsoft said that it no longer views non-competes as a necessary retention tool for employees. Microsoft is headquartered in Washington state, where a new state law requires employers to disclose salary information, but Microsoft is implementing salary disclosures nationwide. The removal of the non-disclosure clause addresses employees’ concerns about employers’ efforts to shield abusive managers.

In addition to reducing potential legal friction, these policies place Microsoft in contrast with other technology companies accused of pay and employment practices intended to reduce employee claims and departures. If these changes result in a competitive advantage for Microsoft, other employers may follow suit by reforming their policies to provide more transparent and employee-friendly practices.