Today, Microsoft is announcing new changes and investments aimed at further deepening our employee relationships and enhancing our workplace culture. Specifically, we are making changes to U.S. based policies and practices related to noncompetition clauses, confidentiality agreements in dispute resolution, pay transparency in our hiring practices, and the initiation of a civil rights audit.
For context, Microsoft is always evaluating our employees’ experience and listening to determine what changes we need to make as a result of what employees need and care about. Over the years, this ‘listen first’ approach has helped us identify what works, what doesn’t and how best to adjust. For example, over the last two years we’ve accelerated our evolution toward hybrid work, in response to employees’ expectations for flexibility and new ways of working. We’ve deeply invested in mental health resources as an integral part of employee wellbeing, through our benefits package and workplace culture. We’ve enhanced our employee listening systems with our anonymous daily pulse and biannual employee signals surveys, and continued investments in our HR systems, and through Yammer. And we’ve deepened our diversity and inclusion investments, with the expansion of our employee resource groups, creation of our Racial Equity Initiative, commercial grade D&I learnings, and our commitment to bridge the disability divide. Employees have helped co-create many of our solutions and their feedback has reinforced, accelerated and deepened our work in each of these areas.
But we have more to do, and the changes below are designed to address that.
Empowering employee mobility: Microsoft believes that all employees should be empowered to work at a company they love and in a role where they thrive. We work hard to retain our world-class talent by making people the priority, and creating a culture that attracts and inspires world-class talent to unlock innovation aligned to our mission. While our existing employee agreements have noncompete obligations, we do not endorse the use of such provisions as a retention tool. We have heard concerns that the noncompetition clauses in some U.S. employee agreements, even when rarely and reasonably enforced, feel at odds with our talent principles. With these concerns in mind, we are announcing that we are removing noncompetition clauses from our U.S. employee agreements, and will not enforce existing noncompetition clauses in the U.S., with the exception of Microsoft’s most senior leadership (Partners and Executives), effective today. In practice, what this means is those U.S. employees will not be restricted by a noncompete clause in seeking employment with another company who may be considered a Microsoft competitor. All employees remain accountable to our standards of business conduct and other obligations to protect Microsoft’s confidential information.
Fostering a safe space for concerns: Microsoft’s policies and practices aim to reinforce that Microsoft is a safe space for employees to raise concerns. Our U.S. employee agreements specifically highlight employees’ rights to discuss or share terms and conditions of employment, or concerns of possible misconduct under Microsoft’s policy. Separate from employee agreements, there have been times when Microsoft resolved disputes with employees or provided separation benefits through agreements that had typically included confidentiality provisions. Microsoft has heard feedback that we can further strengthen our workplace culture and encourage employees to come forward with workplace concerns by addressing these nondisclosure clauses. To that end, Microsoft’s U.S. settlement and separation agreements no longer include confidentiality language that prohibits workers from disclosing alleged conduct that they perceive is illegal discrimination, harassment, retaliation, sexual assault, or a wage and hour violation occurring in the workplace.
Increasing pay transparency: Microsoft has reported on equal pay for equal work since 2014. Each year we conduct equal pay analyses and publicly post equal pay data to hold ourselves accountable and continue enhancing our reporting over time. We also actively seek to implement best practices to further strengthen our equal pay approach. This informed our decision to prohibit the practice of asking job applicants about their salary histories several years ago. And today we’re announcing another best practice with our commitment to publicly disclose salary ranges in all of our internal and external job postings across the U.S., beginning no later than January 2023.
Conducting a civil rights audit: Microsoft’s commitment to diversity and inclusion is grounded in accountability and transparency, knowing there is always more we can and must do. Which is why today, Microsoft is committing to a civil rights audit of its workforce policies and practices. This audit, to be conducted by a third party, will be guided by U.S. civil rights law and Microsoft values with the purpose of identifying areas of opportunity for Microsoft to address. We commit to complete this audit in FY23 and to publish a summary report and follow-on actions.
We believe these workforce initiatives are positive changes for our employees and reflect our fundamental principle that people are the heart and soul of our company and our number one priority.