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Microsoft is removing non-compete clauses in the U.S. and increasing pay transparency

Microsoft has announced a bunch of initiatives to improve its employee-related policies. Although the company operates in many countries, the changes apply to its U.S. workforce only for now. The idea behind the four new initiatives is to foster a healthy culture at Microsoft with a focus on employee wellbeing.

Microsoft logo on a colorful background

The first initiative relates to non-compete clauses for employees. For those unaware, this is a contractual agreement that a person should not enter a competition with their employer after their employment period is over. For example, an Xbox engineer can't join the PlayStation engineering team if they leave Microsoft because that would be in direct competition to Xbox. Although Microsoft says that it rarely enforces this clause, it is removing it from almost all U.S. employee contracts and will not enforce it for existing contracts either. The only exception for this is senior leadership, such as partners and executives, who will still be bound by non-compete clauses.

The second initiative is about confidentiality provisions in managing workplace disputes. Microsoft has now modified all its U.S. settlement agreement legalese to remove instances of confidentiality provisions. What this means is that employees can come forward and disclose any "alleged conduct that they perceive is illegal discrimination, harassment, retaliation, sexual assault, or a wage and hour violation occurring in the workplace". They will not be told to keep silent on such issues legally.

Microsoft is also working on further improving pay transparency. Although the company has publicly posted reports in this area annually since 2014 and it doesn't ask job applicants about their salary history either, it is now going one step further. After January 2023, Microsoft will publicly reveal salary ranges for all its internal and external job postings in the U.S.

Finally, Microsoft has agreed to a civil rights audit regarding its workplace policies. Naturally, this will be conducted by an external party with the corresponding report published by the end of fiscal year 2023.

Microsoft hopes that all four of these initiatives show that its employees "are the heart and soul of our company and our number one priority".

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