Microsoft to end non-compete clauses, disclose salary ranges

Yahoo Finance Live anchors discuss Microsoft announcing it will no longer enforce worker non-competes and NDAs as well as salary range disclosure for all positions.

Video Transcript

JULIE HYMAN: I'm sticking with technology here. A major step for Silicon Valley and an interesting one. Microsoft announcing it will not make most of its US employees sign non-disclosure agreements over workplace misconduct complaints anymore. The company also saying that it is now also going to undergo a civil rights audit as part of its push to improve diversity and inclusion. And so these are kind of somewhat hand in hand.

It's also saying it's going to disclose salary ranges for all jobs in the US. This is something that's going to be mandated by law, by the way, in New York or at least that proposal is on the table. And it feels like some of this stuff is sort of trying to get ahead of regulation that could be coming on these matters.

But culturally, that's a big change for big tech companies you know, that had been trying to, you know, have employees sign these NDAs and non-competition clauses.

BRAD SMITH: Right. And it comes at a time where it's extremely still for them. It is competitive to try and get-- attract and retain talent under some of what would be antiquated models for their corporate culture and their workplace, especially in the face of what has come forward at Google, what's come forward at Activision Blizzard, and the forced arbitration that's had to take place for years there, too.

So for them, in order to go out to the next wave of talent that's out there, they're going to have to make sure that the corporate culture also reflects not just what laws may be coming forth in Washington, but also reflects what they truly are saying that they believe in, which is diversity across the role types and making sure that in your experience that they're fostering it, that culture that doesn't necessarily still lean into some of those kind of legal kind of fail safes, if you will.

BRIAN SOZZI: Can't say this comes at a surprise. Look, they're getting ready to bolt on Activision Blizzard. As Brad mentioned, I mean, one of the worst companies, really, in some time on how it treats employees. I mean, what a disaster story that's been.

JULIE HYMAN: Yeah, I mean, it's interesting, because it's a tricky balance, right? Because the non-compete clause in the past was an effort on the part of these companies to retain people, right? If you can't go work for someone else right away, maybe you'll just stay in the job that you have.

But on the flip side, in this environment where the power dynamic is shifting to the employee and to the person you're trying to recruit, you know, it's not just sort of internal Microsoft culture, it's also the way that worker culture is going right now.

BRIAN SOZZI: And everybody's job hopping.

JULIE HYMAN: Well, and it's sort of interesting that it's happening now. What feels like we are sort of maybe not towards the end, but certainly past the middle of that power dynamic shifting, right? Where at this point where job growth is actually maybe starting to shift a little bit and they're making this change now. It feels a little late, I guess is what I'm saying.

BRAD SMITH: I mean, in non-competes, too, I think for so many of the employees that have a special skill set within the tech companies, who are hired specifically for that elsewhere-- for instance, we saw Tesla employees, a few of them come over from Apple-- or excuse me a few Tesla employees go over to Apple to help with their Project Titan.

If you had a non-compete, then you still would not be able to go over to a company that was starting out that new initiative because you have that very private data, essentially-- I'll put it in the euphemistic format-- in order for that company to still retain their own intellectual property advantages, as they would put it.

JULIE HYMAN: Yeah.