It took just hours for Microsoft (MSFT) Chief Executive Officer Satya Nadella to apologize and retract advice he offered onstage at a conference that discouraged female employees from asking for raises. The remark, he admitted in a companywide e-mail, was “completely wrong.” A more relevant question—and to be clear, Nadella’s apology has been effective enough that there aren’t many people asking it—is whether his comments could be grounds for female employees to complain to the National Labor Relations Board.
The 1935 National Labor Relations Act restricts companies from punishing or threatening punishment against workers who take collective action. What qualifies as “threatening” is open for debate; some experts, including a former chairman of the NLRB, think Nadella’s remarks are grounds for employees to seek intervention by the federal labor watchdog.
While onstage at a conference on women in technology, in response to a question about what he would tell women who are hesitant to ask for a raise, Nadella said:
It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along. And that, I think, might be one of the additional superpowers that quite frankly women who don’t ask for a raise have. Because that’s good karma. It’ll come back, because somebody’s going to know that’s the kind of person that I want to trust. That’s the kind of person that I want to really give more responsibility to.
The remarks fall in a contentious area of U.S. labor law, says Wilma Liebman, who chaired the NLRB during President Obama’s first term and now lectures at Cornell University. “You could make a very clear argument that that means, ‘Don’t ask for a raise, and if you ask for a raise you’re not going to be trusted.’ And ‘you’re not going to be trusted’ translates to ‘you could be in some jeopardy.’”
The issue is whether Nadella’s comments could lead women who were considering banding together to seek better pay to keep their mouths shut; such a move, they might conclude, could cost them the trust of their boss and the chance to advance within the company or even keep the job they have. “If a group of women said these comments chilled them from seeking together to get better pay in the workplace, they could file an unfair labor practice claim with the NLRB,” Paul Secunda, director of the Labor and Employment Law Program at Marquette University Law School, wrote in an e-mail.
Samuel Bagenstos, a University of Michigan law professor and former Department of Justice official, doubts that Nadella’s comments would merit NLRB review, since the CEO didn’t explicitly address that kind of group activism. “Asking for a raise for oneself only would count as concerted activity if there was an argument that the employee was asserting a grievance that was or could be expected to be shared by others,” Bagenstos wrote in an e-mail. Liebman, on the other hand, argues that the comments are “suggesting that if women were to ask for wage increases, they might be treated adversely,” potentially cooling collective efforts as well as individual ones.
Asked about Liebman’s comments, a Microsoft spokesperson wrote in an e-mail, “Microsoft has many avenues for employees to raise questions and concerns and a well-established open door policy.” Nadella’s message to employees expressed support for “programs at Microsoft and in the industry that bring more women into technology and close the pay gap.” He offered his revised advice very succinctly: “If you think you deserve a raise, you should just ask.”
Nadella’s quick mea culpa was wise, Bagenstos said: “I think what he said was ill-advised and certainly harmful to the project of equal pay, but I don’t think it violated or revealed a violation of the law.” Liebman also thinks a hypothetical investigation would turn in part on Microsoft’s apology, and whether it met the standard for what labor lawyers call repudiation. “It’s an absolute certainly,” says the former NLRB chair, “that Microsoft will argue that he remedied the violation by immediately retracting the statement and apologizing.”
There is precedent for investigating public comments from an executive as alleged intimidation. In 2011 the NLRB issued a complaint against Boeing (BA) citing executives’ public comments that appeared to blame striking employees for the decision to locate a new production facility outside Washington State. Republicans raised an uproar, and the investigation was dropped following a settlement between Boeing and its union. Two years later those unionized workers in Washington approved major concessions to forestall shifting more work out of state.
In the unlikely event that Microsoft employees brought what is known as a charge to the NLRB and were vindicated, Liebman notes the most they could conceivably hope for in terms of a remedy would be a requirement that the company post notices pledging not to intimidate employees in the future. The NLRB isn’t allowed to order punitive damages, only back pay, and there wouldn’t be back pay in this hypothetical case.
