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.
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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