Most people have been through it at some point or another in their workplace. Word gets out that someone is getting paid more than other people doing the same job. True or not, the hit to morale and loss of productivity during the fallout are real. So the question becomes, can a company prohibit its employees from comparing their salaries or even discussing compensation in general? If you are a private sector employer in America, the answer to that question is “no.”
The National Labor Relations Board (NLRB) has taken the position over the years that employees have the right under the National Labor Relations Act (NLRA) to discuss their “terms and conditions of employment” with one another, including their wages, benefits, etc. This right applies in both union and non-union settings. Accordingly, the labor board routinely finds companies who prescribe rules that forbid employees from discussing their rates of pay or similar issues to have violated the NLRA.
This remains so even with the current employer-friendly NLRB. On Jan 8, 2019, the board issued a decision in the Tinley Park Hotel and Convention Center, LLC case. At issue in the case were various work rules promulgated by the employer, including one that prohibited employees from disclosing “wage and salary information” to one another. NLRB Chairman John Ring and two other members found that this rule violated the NLRA, upholding years of precedent on this issue. While the current board has been much more employer-friendly when it comes to company personnel policies generally, rules such as the one at issue in Tinley Park remain unlawful. The NLRB General Counsel’s office released a memo last year that confirmed this as well.
The best way to mitigate these types of issues at an organization is to develop a strong culture of equitable and transparent compensation practices. Prohibiting employees from discussing compensation generally remains unlawful (and likely never stopped it from happening in any event).
