Benefits and Compensation, HR Management & Compliance

Ask the Expert: Can I Stop Employees from Talking about Compensation?

Can I stop employees from talking about compensation with each other-e.g., discussing how much they are paid?

Prohibiting employee discussions about compensation is likely to violate the National Labor Relations Act (NLRA), a federal law that protects both unionized and nonunionized employees.  Information about the law is available on HR.BLR under the topics Unions and NLRA.  For your convenience, some relevant portions of the Unions analysis are copied below:

The key provision of the NLRA is Section 7, a declaration of employee rights.  Section 7 gives employees the right to “self organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees” in the exercise of these rights. It is important to remember that the NLRA protects employees even if they are not unionized.

Wage discussions. One of the rights protected by Section 7 is the right of employees to discuss wages and benefits. Employers need to be very careful when drafting policies that could be interpreted to prohibit wage discussions. In addition, employers must take care not to discourage employees from talking about compensation, and should train their managers and supervisors to avoid behavior that might be construed as discouraging such discussions. Courts have shown that they are more than willing to protect employees and their right to discuss wages.

Recently, the National Labor Relations Board has increased its vigilance over company policies and procedures that were once commonplace. Many such policies and procedures have been deemed illegal by the NLRB. NLRB’s General Counsel has issued a guidance memorandum that discusses how company policies may violate the NLRA. Importantly, the memorandum states that even if an employer has not enforced such policies, simply adopting them will subject the employer to liability.

The NLRB has upheld disciplining employees for divulging information classified as “confidential” by the organization. However, in these instances, the information was specifically defined, such as business or trade secrets. Note that employees cannot be disciplined for discussing wages and other conditions of employment, and employers should not designate wage information as confidential.