Microsoft goes to court over expanded US Labor Board rules for contract workers

Dave W. Shanahan

According to Reuters, Microsoft is looking to get a federal court to overturn a ruling by the National Labor Relations Board (NLRB) that extends companies’ responsibilities to contract employees, in addition to regular employees. In August 2015, the National Labor Relations Board broadened the definition of a “joint employer,” thereby making companies liable for workers hired by contractors.

Microsoft is looking to have the US Court of Appeals for the DC Circuit throw out the National Labor Relations Board’s decision on the “joint employer” definition and whether a company that hires another company as a contractor has “direct and immediate” control over that contractor company’s employees and their work conditions.

Microsoft, along with the HR Policy Association presented a joint brief on June 15, calling into question the NLRB ruling in reference to a case involving a waste management company called Browning-Ferris Industries, which is a subsidiary of Republic Services Inc.

Microsoft’s brief objects to NLRB’s ruling and argues that the ruling presents too broad a definition of “joint employer,” and presents a problem for Microsoft and other companies from directing contractors to provide benefits to their employees. Industry experts believe that the ruling may disrupt B2B (business-to-business) relationships and prevent other collaborative efforts with vendors, staffing agencies, subcontractors, and subsidiaries.

NLRB’s ruling affects a case involving Browning-Ferris. Browning-Ferris was considered a “joint employer” of workers who were hired through a staffing agency at a recycling plant and Browning-Ferris had to negotiate with those workers hired through the staffing agency on benefits.

Previously, President Barack Obama has praised Microsoft for restricting its work contracts to contractors who give employees at least 15 days of paid leave annually, part of Microsoft’s Corporate Social Responsibility (CSR) policy. Microsoft notes in their brief that the 2015 NLRB ruling would effectively cause other businesses to end their own CSR plans and prevent other businesses to follow through with establishing their own CSR initiatives:

“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.”

Samuel Estreicher, director of New York University’s Center for Labor and Employment Law, added his thoughts on the NLRB 2015 ruling:

“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.”

Microsoft hopes that the US Court of Appeals for the DC Circuit can disregard the NLRB’s 2015 ruling and make a clear distinction on a company’s CSR plans do not make a company a “joint employer” and more clarification is needed on the definition of a “joint employer.”