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MAY 12, 2005
NEWS ANALYSIS

How Microsoft Changed Its Mind
[Page 2 of 4]


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

Steve,
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.

Sincerely,
DAC GLEAM Board of Directors



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