Microsoft opposes U.S. labor board ruling on contract worker rights

Wed Jun 15, 2016 10:07pm EDT
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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.   Continued...

A Microsoft logo is seen in Los Angeles, California, U.S. June 14, 2016. REUTERS/Lucy Nicholson