January 25, 2022

Microsoft hires law firm to review sexual harassment policies, with report due in the spring – CNBC

Microsoft CEO Satya Nadella listen to an audience member question during the company’s annual shareholder meeting in Bellevue, Wash., on November 30, 2016.

Stephen Brashear | Getty Images News | Getty Images

Microsoft’s board said Thursday it will review the software maker’s policies on sexual harassment and issue a report in the spring after shareholders in November approved a proposal for action.

The assessment will arrive after years of complaints about Microsoft’s investigations of concerns that employees have raised.

The law firm Arent Fox will handle the review. The board said Arent Fox, with offices in Washington and other U.S. cities, has not “done a significant amount of work for the company in the past.” Last year, the United States Olympic and Paralympic Committee hired Arent Fox to review claims of abuse at national team rowing programs. The U.S. men’s coach, Mike Teti, ended up resigning in October.

The review will compare Microsoft’s handling of harassment with that of other companies, which goes further than what was requested in the Arjuna Capital-led shareholder proposal. Arjuna held $17.5 million in Microsoft stock, its second-largest position, at the end of the third quarter.

Arent Fox will submit a report to the board with recommendations, and executives said they will follow with a plan of action to show the board based on the recommendations. The board then plans to release a public report on proposed changes to company culture, if necessary.

“Our culture remains our number one priority and the entire board appreciates the critical importance of a safe and inclusive environment for all Microsoft employees,” Microsoft CEO Satya Nadella said in a statement.

“We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees. I embrace this comprehensive review as an opportunity to continue to get better.”

Nadella confronted the subject last May, following reports that Bill Gates, Microsoft’s co-founder and original CEO, had pursued a sexual relationship with an employee in 2000.

Microsoft received a report on the matter, and a board committee looked into it. Gates left Microsoft’s board in 2020.

For his part, Nadella said anyone can bring up an issue, even if it’s two decades old, and the company will take action. The Microsoft board said Thursday that its report will summarize the results of investigations, including the one involving Gates.

The board report will also consider allegations of harassment and discrimination that female employees made in a 2019 email chain and the company’s response. In addition to the Gates case and the emails, the shareholder proposal alluded to a 2012 class-action lawsuit against Microsoft in which 238 employees alleged sexual harassment.

And in a lawsuit dropped in 2020, former Microsoft employee Katie Moussouris alleged that Microsoft had developed a habit of sex discrimination against women in technical and engineering positions. She said in her original 2015 complaint that in 2008 she had complained about a male director who was harassing other female employees.

Microsoft found that to be true but moved him to a different part of the organization and allowed him to keep his title. Moussouris said she complained after the director retaliated against her by giving her a low bonus; he later received a promotion, she claimed.

That lawsuit was dropped after the U.S. Court of Appeals for the Ninth Circuit affirmed a lower court’s ruling denying that it could proceed as a class-action case.

Workers at other large technology companies Apple and Google have brought attention to the way their employers have dealt with harassment allegations. In 2020, Google settled a lawsuit with shareholders over allegations that they mishandled misconduct among executives, and the company announced a slate of new practices.

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