Microsoft is warning that a recent change to federal labor ruleswould discourage corporate social responsibility practicies.
The tech giant said that the government’s recent expansion of the “joint employer standard” — when one businesses is equally liable for a related business’ workplace violations — would create a legal minefield for corporate social responsibility programs such as Microsoft’s, which involve limiting its business partnerships to companies with ethical practices.
“Simply put, the breadth of the board’s new joint employer standard … will cause companies to question whether [corporate social responsibility] initiatives will contribute to findings of joint employment relationships, and ultimately deter adoption of such initiatives,” the company said in an amicus brief submitted Tuesday in D.C. District Court for a legal case called Browning-Ferris Industries vs. National Labor Relations Board.
The board, the main federal labor law enforcement agency, updated the joint employer policy last year to say that a business can be held legally responsible for another, separate business’ workplace violations if it has “indirect” control over the second business’ workers. That replaced the old standard, which said that joint employer status only applied when one company had “direct control” over another’s workforce. The new standard has been adopted by the Labor Department and other federal agencies.
The rule, which will give unions additional leverage over employers, was applauded by organized labor, which has been a close ally of the Obama adiministration. Business groups have fought the rule, arguing that it will discourage companies from engaging in franchising. The labor board is using the new standard to pursue a major case against McDonald’s Corp., saying that it is responsible for labor violations at its franchises.
Microsoft’s brief lobs a new argument against the rule: That it will make employers think twice about adopting a policy such as Microsoft’s of doing business only with companies that provide certain pay levels and benefits to their employees because such a policy could be construed as acknowledging joint employer status.
“The fear that the NLRB’s new standard will impose adverse consequences on companies that adopt such beneficial policies is not just hypothetical. Shortly after Microsoft announced its new CSR initiative, a union representing employees of one of Microsoft’s suppliers demanded that Microsoft engage in collective bargaining with the union,” the company said.
The brief notes that Microsoft is effectively being punished for engaging in a program that President Obama has repeatedly applauded.
“Thus, on one hand, the United States president has praised Microsoft for its market-leading [corporate social responsibility] initiative that predicates supplier eligibility on the suppliers’ provision of paid leave to their workers, and encourages others to do the same. On the other hand, the NLRB has adopted a joint employment standard that encourages unions to use the same policy to bring an unfair labor practices claim against Microsoft and against other companies that create similar CSR initiatives establishing eligibility criteria for suppliers,” it said.
The five-member board has a Democratic majority and its general counsel, Richard Griffin, who initiated the case against McDonald’s, is a former top lawyer for the International Union of Operating Engineers.
Republicans have complained bitterly about the board’s recent moves and have introduced legislation, called the Employee Rights Act, that would roll back the board’s powers and protect workers who dissent or oppose the union that represents their workplace.
