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Microsoft decides the best way to deal with unions is not to fight them

June 3, 2022, 10:20 AM UTC

Good morning. David Meyer here in Berlin, filling in for Alan.

Entirely predictably, German union officials are less than gruntled with Elon Musk’s abrasive and sweeping get-back-to-the-office-or-quit challenge to his workers. “In Germany an employer cannot dictate the rules just as he likes,” thundered IG Metall’s Birgit Dietze.

Musk is famously union-averse—CNBC reported just yesterday on Tesla’s efforts several years ago to monitor organizers within the company. But, as Dietze noted, Germany’s constitution provides a strong foundation for organized labor; there’s not much he can do about unionization in this country.

“A worker can rely on the strength and power of her or his union if she or he does not want to accept the demands of the company,” Dietze said. And IG Metall, with 2.2 million members in sectors ranging from metalworking to tech, is a real heavyweight. Expect (pardon the pun) sparks—not least because Musk’s broadside against home working just happens to coincide with his stated desire to lop 10% off Tesla’s headcount (he has a “super bad feeling” about the economy).

Contrast that with the stance of Microsoft, which has just decided the best way to deal with unions is to stop trying to fight them.

Microsoft president Brad Smith wrote yesterday that the software giant was trying to respond proactively to recent unionization drives across the U.S., including in the tech sector (see also: Apple making its retail work schedules more flexible as unionization efforts mount). And although Redmond insists that “our employees will never need to organize to have a dialog with Microsoft’s leaders,” it’s fine if they do so.

“We recognize that employees have a legal right to choose whether to form or join a union,” wrote Smith (who is, by the way, a paragon of clarity in corporate communications—more of this, please). “We respect this right and do not believe that our employees or the company’s other stakeholders benefit by resisting lawful employee efforts to participate in protected activities, including forming or joining a union.”

Smith also committed to “creative and collaborative approaches with unions when employees wish to exercise their rights and Microsoft is presented with a specific unionization proposal.” Importantly, he also acknowledged that Microsoft has “far more learning ahead of us than behind us” on this front, and other companies and sectors may find a different approach works for them.

“Perhaps as much as anything, we bring a sense of optimism grounded in an appreciation that success in a competitive global economy requires that businesses and labor strive to work together well,” Smith wrote. “We’re willing to bet that a company that listens to and works well with its employees is likely to have a winning hand.”

Can’t wait to see how Microsoft’s peers react to that. More news below—and do also take a minute to read through the World Health Organization’s new warning about the mental-health and psychosocial effects of climate change; as with the pandemic, this will over time force businesses to pay more attention to this aspect of their employees’ well-being.

David Meyer
@superglaze

david.meyer@fortune.com

TOP NEWS

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Genocide claims

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Russian sanctions

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Chinese stocks

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AROUND THE WATERCOOLER

Sandberg’s departure

Fortune’s Jeremy Kahn and Jonathan Vanian report on how Sheryl Sandberg’s imminent departure may go down internally, at a time when there’s already big disquiet over Meta’s metaverse push. (Bonus read: The Journal has a piece on the contribution burnout made to Sandberg’s decision. It also notes she was being investigated over her use of corporate resources when planning her upcoming wedding.) Fortune

Zillow return

Here’s Fortune’s Lance Lambert on Zillow, which is trying to recover from the collapse of its home-flipping business—as the market is cooling: “Far from soul searching, the company is already on to what it sees as the next big thing—something it calls ‘a housing super app.’ Despite the hyperbolic name, this app actually seems very much like a return to Zillow’s core business, serving the needs of agents and homeowners.” Fortune

Hidden yacht

A yacht belonging to Russian oligarch Andrey Melnichenko is sitting in a creek in the north of the United Arab Emirates, flying an Emirates flag. That will make it difficult to impound—the UAE is neutral, making it a natural haven for Russian assets at this time. (Turkey too.) Fortune

Meme stocks

The SEC thinks meme stocks are a joke, and r/WallStreetBets users want a televised apology. Fortune

This edition of CEO Daily was edited by David Meyer.

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