Microsoft eliminates controversial practices to protect workers and comply with state law

Microsoft employees across the country can say farewell to confidentiality clauses in settlements and separation agreements, the company announced this week.

The policy change announced Wednesday came a day before a new Washington law prohibiting nondisclosure agreements from preventing the disclosure of workplace abuses went into effect. Another law will soon require salary ranges be disclosed in job postings.

Going forward, workers should be able to speak freely about any harassment, discrimination, retaliation, sexual assault or wage theft they experienced at work, even after they’ve left Microsoft.

The company has a reputation for poorly addressing allegations of misconduct. Seattle Times reporting in 2018 found complaints against the company that described a culture of casual sexism, a male-dominated hierarchy and poor resolution of grievances. Sexual harassment and abuse allegations still plague the company, which pledged in January to conduct a third-party review of its policies and release findings from investigations into senior leaders, including Bill Gates. The report, which was expected this spring, has yet to be released.

Microsoft’s deputy general counsel Amy Pannoni and corporate vice president Amy Coleman announced the change in a Wednesday blog post, along with three other measures to improve the employee experience. The Redmond tech giant will publicize salary ranges for all U.S. jobs by January 2023, eliminate noncompete agreements, and hire a third party to conduct a diversity audit in fiscal year 2023, which begins July 1.

Policy changes like these are somewhat reassuring since they signify that Microsoft is open to listening to its employees, says Cher Scarlett, a workers’ rights advocate known nationally for her public criticism of discrimination at Apple. She wonders, though, why the company chose to take such a stance only after new state laws forced it to comply.

“I do think it feels a little bit disingenuous,” Scarlett said. “You could’ve started doing this back in 2018 during #MeToo, but you didn’t.”

Scarlett encouraged women at her former employer, Activision Blizzard, to share their experiences with workplace sexual misconduct. Microsoft still intends to acquire the gaming company, which is currently under investigation from the U.S. Securities and Exchange Commission for its treatment of sexual misconduct and gender discrimination complaints.

These are the two laws that took effect Thursday:

  • The “Silenced No More Act,” which prohibits nondisclosure clauses in both employee settlements and separation agreements that would prevent a former employee from discussing workplace abuse or mistreatment. The Washington law also retroactively voids any nondisclosure agreements signed during the hiring process.
  • Senate Bill 5761, which requires employers to list salary ranges and additional benefits on all print and digital job postings, including for internal transfers. It goes into effect Jan. 1.

Rep. Liz Berry, D-Seattle, who introduced and spearheaded the Silenced No More Act, said she applauds Microsoft’s leadership and hopes other Washington-based companies follow suit. She’s excited that Microsoft workers across the country will benefit from the protections in her bill.

“Clearly, we’re leading here in Washington on protecting workers, and companies like Microsoft who are based here are paying attention,” Berry said. “I’m proud that they’re here in our state.”

Sen. Karen Keiser, D-Des Moines, who worked closely with Berry on the bill, echoed Berry’s praise for the company.

“It’s important, I think, to have this kind of leadership from Microsoft at this point — to show that major companies can do just fine with a workforce that feels free to discuss issues of concern with their employer or with others,” Keiser said. She hopes to see employers in other industries, such as health care, law and media, adopt similar nationwide policies.

Scarlett is glad Microsoft has changed its policies, rather than staying quiet or, she said, taking action against its workers as Amazon and Apple have. She hopes companies based in states without Silenced No More laws will act progressively and choose to eliminate nondisclosure clauses from their settlement and separation agreements.

Microsoft also axed noncompete clauses on Wednesday. This gives workers greater mobility and could allow them to take advantage of today’s competitive labor market. A 2019 Washington state law prohibited the use of noncompete agreements for workers making under $100,000 annually. Microsoft’s new policy goes one step further and removes noncompete agreements for everyone except “partner” and “executive” level employees.

While these policies aim to empower workers, Microsoft’s Pannoni and Coleman acknowledged in their blog post that Microsoft still has much work to do to improve company culture. Wednesday’s changes come on the heels of President Brad Smith’s abrupt announcement that workers “will never need to organize” and the sudden departure of HoloLens team leader Alex Kipman, who was accused of inappropriate behavior toward women employees. 

The January pledge to review sexual misconduct policies came at the request of shareholders last year. Several claims of misconduct surfaced in a 2019 employee email thread, and a separate 2019 complaint stated that Gates attempted to start a romantic relationship with an employee in 2000. The board investigated but said last year the process wasn’t concluded because Gates stepped down as a director.

This story contains information from Seattle Times archives.

Microsoft Philanthropies underwrites some Seattle Times journalism projects.