Arguing that a case by a U.S. labor board would have big implications for the technology company, Microsoft Corp has asked a federal court to throw out a ruling by the board extending the responsibility of companies for contract workers.

Expanding the definition of a “joint employer”, the National Labor Relations Board had made changes that could require companies to have liability for workers hired by contractors and to bargain with more companies. the decision by the board was taken in August 2015.

Going beyond the debate of whether a company had “direct and immediate” control over employment conditions of another company’s workers, the decision had expanded the test for joint employment and induced to consider indirect or unexercised control. The U.S. Court of Appeals for the D.C. Circuit is currently hearing the case.

In a case involving California waste management company Browning-Ferris Industries, a subsidiary of Republic Services Inc, Microsoft and industry group HR Policy Association submitted a joint brief opposing the NLRB ruling. For fear the directive would make Microsoft a joint employer under the new standard, the decision would discourage Microsoft and others from directing contractors to provide benefits to their employees, Microsoft said in its brief arguing against the the 2015 ruling.

A range of business-to-business relationships, including those that companies have with vendors, staffing agencies, subcontractors and subsidiaries, as well as franchisees could be potentially disrupted by the ruling, say business groups.

Contract workers are frequently used by Silicon Valley companies for tasks from security to writing software.

Microsoft said that at the end of last year it had nearly 113,000 employees. the Seattle Times quoted an unnamed source as saying there were 81,000 contract employees at one point in 2015 in Microsoft even as a spokeswoman declined to say how many temporary and contract workers it employed.

Browning-Ferris had to negotiate with workers as it was a joint employer of workers hired through a staffing agency at a recycling facility, said the labor board’s 2015 ruling.

The ruling makes it impossible for employers to structure their business relationships with contractors since the U.S. labor board standard for “joint employment” is so broad and vague, Browning-Ferris has said.

As a part of its so-called Corporate Social Responsibility, or CSR, policy, Microsoft had restricting its work contracts to suppliers who give employees at least 15 days of paid leave annually, which has been praised by President Barack Obama.

“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 say that under the NLRB’s ruling in Browning-Ferris, such corporate social responsibility policies calling for minimum employee benefits are unlikely to make companies a joint employer.

“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.

Such CSR plans did not make a company a joint employer, Microsoft argued that the court should make this clear.

(Adapted from Reuters)

Categories: Regulations & Legal