- Microsoft employees are no longer prevented from looking for roles in companies like Amazon and Google.
- Microsoft announced Wednesday that it will not enforce non-compete clauses, except for senior executives.
- The change comes amid a growing movement to crack down on the use of NCCs in contracts.
Microsoft employees will be free to look for work at Google and Amazon after the internet giant announced it will no longer apply non-compete clauses (NCCs) against most of its staff.
The change is one of four updates announced in a blog post Wednesday, including plans to abandon nondisclosure agreements, conduct a civil rights audit of its existing employment policies, and commit to providing salary bands on all job descriptions. internal and external.
NCCs are used by companies to prevent employees from moving into companies considered direct competitors. While there is more understanding when they are included in c-suite and senior manager contracts, their use against lower-level workers has been criticized as being too restrictive and binding people on unfair terms.
Microsoft has enforced them in some employee contracts, but as of today, the company is removing clauses from employee contracts and won’t enforce existing U.S. clauses, the company said.
“We have heard concern that the non-compete clauses in some employee agreements in the United States, even when applied infrequently and reasonably, run counter to our talent principles,” said the blog post, attributed to Amy Pannoni. , Microsoft vice general counsel; and Amy Coleman, Microsoft corporate vice president of human resources.
They will still be enforced against the company’s senior leaders – those who are partners and executives – but it means that other employees, in theory, are no longer barred from looking for work in any company “considered” a competitor of Microsoft.
Big tech companies like Amazon, Google, and Salesforce are generally considered to be among its main rivals.
A Microsoft spokesperson told Insider that the company will not retroactively amend employee contracts, but “will honor that existing clauses will not apply.”
The change comes in the midst of a growing move to crack down on the use of NCCs.
NCCs are already limited in a handful of states, including Microsoft’s home state of Washington, where they are inapplicable against employees earning less than $ 100,000.
In July, President Biden issued an executive order urging the Federal Trade Commission to limit or ban the use of NCCs to encourage greater mobility in the labor market.
Microsoft, which has faced multiple allegations about its toxic culture in recent years, said the changes are aimed at “improving its workplace culture.”
The company “always evaluates the experience of our employees and listens to determine what changes we need to make as a result of what employees need and care about,” the blog post states.
Being more transparent about pay can help reduce pay inequality
Microsoft also announced plans to improve pay transparency within its job postings and has pledged to publicly disclose pay bands in all internal and external job postings in the United States, starting January 2023.
Activists argue that keeping job seekers in the dark about how much they and their potential colleagues earn reinforces existing gender and ethnic wage gaps.
A study by UK recruiter Reed found that withholding salary details and using words like “competitive” made people less likely to apply for roles. Providing women and people of color with more information allows them to negotiate higher pay and a level playing field.
Colorado, Nevada, Connecticut, California, Washington and Maryland have all introduced some state rules on pay transparency. Employers in New York City are required to disclose payroll information on job postings after the new legislation went into effect last month.