NLRB: Barring employees from discussing salary is a bad idea

ConfidentialSection 7 of the National Labor Relations Act protects the rights of employees to discuss wages and other benefits with each other and nonemployees. By maintaining a rule that restricts employee freedom in this regard, an employer violates Section 8(a)(1) of the Act.

How does this play out in the real world? Find out after the jump…

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An example comes from a recent case in which an upscale women’s clothing store had this in its employee handbook:

Wage and Salary Disclosure
Compensation programs are confidential between the employee and [employer] Disclosure of wages or compensation to any third party or other employee is prohibited and could be grounds for termination.

Yeah, that’ll do it all right. Or how about this? (Same employer)

Commercial Information Security
As a matter of course employees of [employer] will have access to confidential and proprietary information. This information includes, but is not limited to, personnel information, pricing client lists, contractual agreement, intellectual property and marketing/sales strategies. It is a condition of employment that you not disclose this information to third parties during or after employment. Disclosure of [employer] confidential information without express written approval is prohibited. (emphasis added).

Not as clear-cut as the first example, but the ambiguous “personnel information” was construed by an Administrative Law Judge in the case linked above to forbid employees from disclosing wages and compensation.

Many businesses place restrictions on the ability of employees to share purportedly confidential or proprietary information. Nothing wrong with that, except  be very careful not to overgeneralize what may constitute confidential or proprietary information. Anything that could reasonably be construed as precluding an employee from discussing wages and benefits — like, for example “personnel information — is going to rub the National Labor Relations Board the wrong way.

(h/t Julia Emfinger @ GT L&E Blog)

Updated:
  • http://www.askamanager.org Alison Green – Ask a Manager

    You could prohibit employees from discussing wages outside of the company though, right?  As long as you don’t prohibit them from discussing it with each other?

    • http://www.theemployerhandbook.com/ Eric B. Meyer

      Thank you for the question, Alison. Check out page three of the hyperlinked case. The ALJ notes that Section 7 of the National Labor Relations Act protects the right of employees to discuss the wages and other benefits with each other AND WITH NONEMPLOYEES (my emphasis) and any rule that chills that expression would violate Section 8(a)(1) of the Act. So, according to the ALJ, the answer to both of your questions is no.

      Eric

      P.S. – Love your blog!

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      • http://www.askamanager.org Alison Green – Ask a Manager

        Wow — that’s good to know. I had assumed that employers could prohibit discussion with non-employees, since I’ve always thought of the NLRA as ultimately being about the right to organize … with your fellow employees, not with others. Very intriguing.

        I sometimes advise people who want to avoid sharing their salary history with a prospective employer to simply say that it’s covered under their confidentiality agreement with their past employer. This throws that advice into jeopardy a bit (assuming that the person they’re talking to knows this piece of the law, which they probably don’t)!

        Thank you!

        • http://www.theemployerhandbook.com/ Eric B. Meyer

          I’m just drawing from the ALJ decision. No legal advice from me. ;)

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        • Hooker

          I am a union steward and an organizer. As an organizer, I am by definition assisting employees who are not unionized at their workplace in organizing a union. Usually, I am contacted by frustrated employees from a company (cold-called by them). A company policy forbidding them discussing terms and conditions of employment with me would seriously impact my ability to assist them in their organizing efforts.

          • http://www.theemployerhandbook.com/ Eric B. Meyer

            Hooker – Thank you for clarifying.

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            NOTE: This comment is waiting for your approval. It is not yet published on your site.
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            Hooker <hooker@cwa4034.org> (unregistered) wrote, in response to Alison Green – Ask a Manager:
            I am a union steward and an organizer. As an organizer, I am by definition assisting employees who are not unionized at their workplace in organizing a union. Usually, I am contacted by frustrated employees from a company (cold-called by them). A company policy forbidding them discussing terms and conditions of employment with me would seriously impact my ability to assist them in their organizing efforts.
            Link to comment
            IP address: 76.235.191.241

  • http://lubinandenoch.com/ Stan

    The NLRB, at long last, has recognized that an employee can discuss wages with non-employees because the non-employee may be a union representative.  Even, if the comment is not to a representative, the employee may just want some advice, etc.  Essentially, employers should just act to protect their trade and other legitimate business secrets and not try to keep employment issues a secret.  The NLRA applies to the latter.

    • http://www.theemployerhandbook.com/ Eric B. Meyer

      Thanks for the note, Stan.

  • Anon

    My employee just threatened to fire me for discussing my salary, bonuses with other employees etc as the employee handbook prohibits employees from discussions of this type. Is that legal? What can I do about it?

    • http://www.theemployerhandbook.com/ Eric B. Meyer

      I cannot give specific legal advice on this blog. You should contact a lawyer in your area.
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