Can A Company Forbid Workers From Discussing Salaries?
Many companies forbid or discourage employees from discussing salaries with their coworkers. These rules may be set out formally (such as an employee handbook or confidentiality policy) or informally (such as a verbal warning that “we don’t discuss that around here.”) Employers often believe that keeping pay information secret is necessary to protect morale and prevent workplace jealousies from arising. However, these policies – however common – are illegal under federal law.
Section 7 of the National Labor Relations Act guarantees employees the right to engage in “protected concerted activity.” This is a legal term of art that essentially grants employees the right to work together to seek better pay, benefits, or working conditions, and it includes the right to discuss their salaries or pay rates with their coworkers. Terminating or disciplining an employee for speaking out about salaries may constitute an unlawful labor practice under the Act and could lead to an order reinstating the employee as well as a monetary award of backpay and fines.
Importantly, this right is limited to employees who voluntarily disclose their salaries. The Act does not require that employers publicize salary information, or give employees the right to access company records to find out what others are paid. And if an employee does not want to share salary information with coworkers, he or she is free to keep it a secret. However, that choice must be left to the employee.
Many seemingly benign employment policies can run afoul of the National Labor Relations Act if they are worded improperly. It is very easy for an employer to unknowingly violate the Act, and it is critical to have experienced legal assistance when drafting employee handbooks or policies. If you have any questions about the NLRA, or employment policies in general, call me today at (504) 267-0777 or email me here.