Some employers have policies that discourage employees from discussing their wages or salaries with other employees. The motivation for such policies is often a desire to avoid controversy or complaints about differing wages and to slow the rate of wage growth. However, most policies against employees discussing their pay with other employees are illegal.
Since 1935, the National Labor Relations Act (NLRA) has guaranteed the right of workers to unionize without interference or reprisals from management. It prohibits unfair labor practices that might interfere with union organizing, and provides employees the right to organize, form, join, and assist labor organizations, to bargain collectively, and to protest, picket, and strike.
In particular, it prohibits employers from interfering with, restraining, or coercing employees from engaging is protected activities by threats, warnings, orders, or other forms of interference. Importantly, the employer’s motive or success in coercion does not affect whether a violation has occurred—the conduct alone is a violation if it has a tendency to interfere with employees’ free exercise of their NLRA rights.
Freedom to Discuss Pay
The National Labor Relations Board (NLRB), charged with enforcing this law, has repeatedly held that an employer’s policy against employees discussing their wages with others is unlawful. This is because wages are a “vital” condition of employment, and are one of the primary reasons for organizing in the first place. Of course, the law seeks to balance the employee’s interest in organizing with the employer’s interest in worker productivity and customer relations, so some restrictions are permitted.
For example, employees can be prohibited from discussing their pay on the selling floor of a retail establishment. On the other hand, a blanket restriction against discussing pay with other employee anywhere on the job site is usually considered unlawful. The U.S. Supreme Court considers the ability to communicate with others at the job site about union organizing to be a necessary component of the employees’ NLRA rights. Under this rationale, a casino has been permitted to forbid discussion of a tip-splitting policy on the gaming floor, but not in other areas of the workplace, such as locker rooms, where customers are not present.
Naturally, rules against discussing pay at any time, on or off the job, are also unlawful. Thus, an employee cannot be asked to refrain from discussing his or her wages with other employees, out of concern that he or she is being paid more than the others. Even just requesting that employees observe such a policy can be seen as unlawful, even when the employees ignore the policy.
In addition, disciplining an employee who violates an unlawful policy against discussing wages is itself a violation of the NLRA. Thus, employers can create even more problems for themselves by enforcing an unlawful policy. Finally, these restrictions apply whether an employee is currently represented by a union or not—the law does not just protect union activity, it protects organizing activity as well.
Employers should tread lightly when trying to discourage employees from discussing their wages with others. There are some lawful restrictions that employers may impose, but the employer must demonstrate a legitimate “overriding business justification” for doing so. What kind of justification actually meets this standard should be discussed with a capable employment attorney.