The two sides will also work together on the future of artificial intelligence, in a first-of-its-kind partnership on AI and the future of the workforce as business and labor grapple with the impact of the technology.

Microsoft President Brad Smith told Reuters the "neutrality agreement provides a high-level of commitment and clarity as to how we'll work with the AFL-CIO and its affiliates if we have employees or even employees of suppliers who want to pursue the formation of a union."

The AFL-CIO is the largest federation of unions in the United States made up of 60 unions representing about 12.5 million workers.

AFL-CIO President Liz Shuler said Microsoft's position was in stark contrast to other tech companies that aggressively fought efforts to unionize. "Their positioning is -- if workers want to organize we shouldn't stand in their way," Shuler said. "Every company basically fights us when workers want to organize."

Microsoft previously agreed to a legally-binding labor neutrality agreement when Activision Blizzard employees expressed interest in joining a union as part of Microsoft's acquisition of the company.

Microsoft has a major partnership with ChatGPT maker OpenAI and committed to pumping more than $10 billion into the startup. Surging popularity of so-called generative AI, which uses data to create new content like ChatGPT's human-sounding prose, could remake human society and make obsolete many jobs.

Smith said it was important for tech companies to design AI "with the needs of workers in mind and for workers to have a voice and provide feedback that influences the direction this technology takes."

Both the union and AFL-CIO have agreed to work jointly on public policy to ensure workers have the skills "as the country moves into the future."

Shuler and Smith are holding a joint event Monday about AI and work. The goal of AI is to "boost the productivity of workers, reduces the drudgery in jobs" and translates those efficiency gains in higher standards of living, Smith said.

Shuler said workers want a voice in how AI gets deployed "and do I have a future pathway if indeed my job gets downgraded."