How Microsoft Changed Its Mind

The software giant decided to take an active role in anti-discrimination. These internal e-mails and petitions tell the story of why

Here are five documents that track the evolution of Microsoft's stance on a piece of antidiscrimination legislation in Washington state.

After a Seattle alternative newspaper broke the news that Microsoft (MSFT ) was withdrawing its support for the bill, CEO Steven Ballmer explained the decision to employees in this e-mail, dated Apr. 22.

Over the past two days, there've been a lot of stories about Microsoft and our position on an anti-discrimination bill in Olympia.

I've heard from a number of employees, and I take all of the input on all sides seriously, so I wanted to talk directly with all of you about the company's position and how I view these issues.

First, I want reaffirm my personal commitment -- and the company's commitment -- to keeping Microsoft a company that values diversity. That will never change.

As long as I am CEO, Microsoft is going to be a company that is hard-core about diversity, a company that is absolutely rigorous about having a non-discriminatory environment, and a company that treats every employee fairly.

I'm proud of our track record on diversity issues. We were one of the first companies to provide domestic partner benefits, or to include sexual orientation in our anti-discrimination policies. And just this year, we became one of the few companies to include gender identity or expression in our protection policies.

There have been several news stories that imply that Microsoft changed its position on an anti-discrimination bill, HB 1515, because of pressure from a conservative religious group. I want to make it clear that that is not the case.

When our government affairs team put together its list of its legislative priorities in Olympia before the Legislative Session began in January, we decided to focus on a limited number of issues that are more directly related to our business such as computer privacy, education, and competitiveness. The anti-discrimination bill was not on this list and as a result Microsoft was not actively supporting the bill in the Legislature this year, although last year we did provide a letter of support for similar legislation.

On February 1, two Microsoft employees testified before a House Committee in support of the bill. These employees were speaking as private citizens, not as representatives of the corporate position, but there was considerable confusion about whether they were speaking on behalf of Microsoft.

Following this hearing, a local religious leader named Rev. Ken Hutcherson, who has a number of Microsoft employees in his congregation, approached the company, seeking clarification of whether the two employees were representing Microsoft's official position. He also sought a variety of other things, such as firing of the two employees and a public statement by Microsoft that the bill was not necessary.

After careful review, Brad Smith informed Rev. Hutcherson that there was no basis for firing the two employees over the misunderstanding over their testimony, but did agree that we should clarify the ambiguity over the employee testimony. Brad also made it clear that while the company was not taking a position on HB 1515, the company remains strongly committed to its internal policies supporting anti-discrimination and industry-leading benefits for gay, lesbian, bisexual, and transgender employees.

I understand that many employees may disagree with the company's decision to tighten the focus of our agenda for this year's legislative session in Olympia. But I want every employee to understand that the decision to take a neutral stance on this bill was taken before the Session began based on a desire to focus our legislative efforts, not in reaction to any outside pressure.

I have done a lot of thinking and soul-searching over the past 24 hours on this subject, and I want to share with you my thoughts on how a company like Microsoft should deal with these kinds of issues.

This is a very difficult issue for many people, with strong emotions on all sides. And that makes it a very difficult issue for me, as the CEO of this company.

On this particular matter, both Bill and I actually both personally support this legislation that would outlaw discrimination on the basis of sexual orientation. But that is my personal view, and I also know that many employees and shareholders would not agree with me.

We are thinking hard about what is the right balance to strike -- when should a public company take a position on a broader social issue, and when should it not? What message does the company taking a position send to its employees who have strongly-held beliefs on the opposite side of the issue?

The bottom line is that I am adamant that Microsoft will always be a place that values diversity, that has the strongest possible internal policies for non-discrimination and fairness, and provides the best policies and benefits to all of our employees. I am also adamant that I want Microsoft to be a place where every employee feels respected, and where every employee feels like they belong. I don't want the company to be in the position of appearing to dismiss the deeply-held beliefs of any employee, by picking sides on social policy issues.

It's appropriate to invoke the company's name on issues of public policy that directly affect our business and our shareholders, but it's much less clear when it's appropriate to invoke the company's name on broader issues that go far beyond the software industry -- and on which our employees and shareholders hold widely divergent opinions. We are a public corporation with a duty first and foremost to a broad group of shareholders. On some issues, it is more appropriate for employees or shareholders to get involved as individual citizens. As CEO, I feel a real sense of responsibility around this question, and I believe there are important distinctions between my personal views on policy issues and when it's appropriate to involve the company.

I know that some employees will still feel frustrated by the position the company has taken, but I wanted you to hear directly from me on this. We will continue to wrestle with how and when the company should engage on these kinds of political issues. And above all, I want you to know that as long as I am CEO, Microsoft will always be committed to diversity and non-discrimination in all of our internal policies.



Upset by Microsoft's decision, GLEAM, a group representing Microsoft's gay, lesbian, bisexual, and transgendered employees, sent Ballmer this e-mail requesting the company renew its support for the bill.

Sent: Friday, April 29, 2005 9:59 AM

To: Steve Ballmer

Cc: Bill Gates; Brad Smith (LCA); Lisa Brummel; Bill Gates; Mark Murray (CORP PR); DAC GLEAM Board of Directors; DAC GLEAM Co-Chair's Equality Task Force

Subject: Microsoft Values and the Anti-Discrimination Bill


Your passion for diversity is obvious. You built a workplace where GLBT employees felt empowered to do great things. We share your pride in Microsoft's track record on diversity issues.

Our company values are clearly documented and our internal policies against discrimination are unquestioned. Because of our long-standing support for anti-discrimination legislation, the withdrawal of support from HB1515 was a shock. We are deeply concerned about the way the decision was made, the failure to anticipate its impact, and our inability to quickly repair the damage once it had become evident. This shook our trust in executive management, and has left us feeling abandoned, depressed, and embarrassed for Microsoft.

Despite these events, we remain fully committed to Microsoft. We would like to partner with you to achieve the goals that you have outlined in the past: 1) Microsoft will be the leader on diversity issues in the technology industry; and 2) Our senior leadership will exemplify Microsoft values.

We have heard from GLEAM members, members of other diversity groups, allies among our fellow employees, and the GLBT community outside of Microsoft. Many employees have signed a public letter of support. Considering this input, we have identified two areas critically affected by recent events, and actions that we propose as first steps.

Public Image

Microsoft's image with customers, partners and the industry regarding diversity has been damaged by the perception that Microsoft has reneged on its commitment to its stated values.

Proposed First Steps

1. Microsoft should publicly:

• Support anti-discrimination legislation;

• Acknowledge that our neutral position on HB1515 was a mistake;

• Reaffirm our emphatic commitment to diversity as a core Microsoft value; and

• Enforce compliance with our stated policy that all vendors must cooperate with Microsoft's commitment to a workforce free of harassment and discrimination.

Attached please find proposed language expressing these points, suitable for a press release. Our experience suggests that careful crafting of such statements helps to prevent misunderstandings (timeline: 7 days).

Microsoft should identify a business owner to proactively manage Microsoft's image with customers, partners and the industry regarding diversity (timeline: 7 days). Microsoft should reach out to the GLBT community, partnering with GLEAM as subject matter experts (timeline: intense outreach, 60 days; sustained outreach, FY06 and beyond).

Lack of Trust

Employees are questioning executive leadership's commitment to our stated values.

Proposed First Steps

• Steve Ballmer should communicate the proposed statement to employees (timeline: 7 days).

• Microsoft should support a diversity-sponsored education and awareness event for employees, highlighting our hard-core commitment to diversity (timeline: 30 days).

• Microsoft should implement a mandatory workshop to foster GLBT awareness among executives and senior managers (timeline: Q1 FY06).

We look forward to partnering with you to achieve these goals.


DAC GLEAM Board of Directors

Microsoft employees began to take sides on the issue, signing petitions. This one, asking Microsoft to support the bill prohibiting discrimination on the basis of sexual orientation, had 1,741 signatures on May 10.

Please help Microsoft live up to its values by signing this letter. To add your name, click New Item below.

I'm proud of Microsoft's values and our track record on diversity. I was surprised and disheartened to learn that we decided not to support House bill 1515 after supporting this bill last year. Our values clearly state that discrimination based on sexual orientation is unacceptable. Withdrawing our support for this bill is not a neutral statement -- it sends a clear message to the world that Microsoft will not stand up for our stated values.

Steve Ballmer's recent email to the company asks, "When should a public company take a position on a broader social issue?" The fact is that Microsoft, like many other companies, has already taken a position on discrimination. We have a responsibility as a leading corporation to support legislation related to this fundamental workplace issue. I believe it is a mistake to dismiss discrimination as a social issue; it is a civil rights issue.

From a PR perspective, it is embarrassing that last Monday we launched our largest marketing campaign ever and on Friday we received a black eye in the New York Times for withdrawing support for this bill. Companies such as Boeing, Coors, QWEST -- and even Nike, a company with a poor human rights record due to sweatshop labor, supported this bill. I can only imagine that this further damages our already embattled brand.

What can we do to remedy the damage we've done to civil rights in Washington and to reaffirm our commitment to living up to our values?

Here are three suggestions:

1. Reinstate support for HB1515 and other anti-discrimination legislation.

2. Investigate whether Brad Smith's decision was influenced by Pastor Ken Hutcherson. The evidence outlined in [Seattle alternative weekly] The Stranger article indicates this was a factor.

3. Make a financial donation to an anti-discrimination group in WA.

I hope that our senior leadership has the courage to take action that shows Microsoft stands firmly united against discrimination.

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