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THIS WEEK’S E-TIP: Ban on Employee Discussion of Pay Q&A
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THIS WEEK’S E-TIP: Ban on Employee Discussion of Pay Q&A
While the Constitutional right to “free speech” generally does not apply
in
the private workplace, you still cannot ban employees from discussing
their terms and conditions of employment. |
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THIS WEEK’S E-TIP: Ban on Employee Discussion of Pay Q&A
Q: Can we prohibit employees from discussing their pay rates
with
other coworkers or is that against the law? One of our employees has
been asking others about their pay because she was dissatisfied with
her
recent raise.
A: A total ban on wage discussions among nonsupervisory
employees (i.e., a prohibition that goes beyond limiting the time
and
place of discussions) is prohibited under the National Labor
Relations
Act (NLRA). (Download
free Pay Procedures model policy.) The NLRA
is the federal law that gives employees the right to organize and to
engage in concerted activities for collective bargaining or other
mutual
aid or protection. It applies to all organizations regardless of
size and
protects both union and nonunion employees.
Since higher wages are a frequent objective of employee organizing
activity, rules prohibiting wage discussions have been interpreted
by
courts and the National Labor Relations Board (NLRB) (the federal
agency charged with implementing the NLRA) to be unlawful
interference
with the right of employees to engage in organizational and
concerted
activity.
So, for example, in Cintas Corp. v. NLRB, 482 F.3d 463 (D.C. Cir.
2007),
the court upheld the NLRB’s decision ordering an employer to rescind
its
policy prohibiting disclosure of “any information concerning the
company,
its business plans, its partners, new business efforts, customers,
accounting and financial matters.” The court agreed with the NLRB’s
determination that employees could reasonably interpret the rule’s
unqualified prohibition of the release of “any information”
regarding “its
partners” to unlawfully restrict their discussion of wages and other
terms
and conditions of employment with fellow employees.
And, in Citizens Inv. Servs. Corp. v. NLRB, 430 F.3d 1195 (D.C. Cir.
2005), the court enforced the NLRB’s ruling that the employer
violated
the NLRA when it fired an employee because of his protected
concerted
activity of protesting compensation terms and payments for financial
consultants.
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Further, in Double Eagle Hotel & Casino , 341 N.L.R.B. 112 (2004),
enforced at 414 F.3d 1249 (10th Cir. 2005), cert. denied, 546 U.S.
1170
(2006), the court found that an employer could limit employee
discussions of working conditions, including pay issues, in areas
frequented by customers, but could not impose a complete ban on such
discussions without violating the NLRA.
In addition, the policy does not even have to be in writing to
violate the
NLRA; it only has to be orally communicated to employees. For
example, in NLRB v. Main St. Terrace Care Center, 218 F.3d 531 (6th
Cir. 2000), the court upheld the NLRB’s ruling that the employer
violated
the NLRA because its managers orally instructed employees not to
discuss wages. |
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Note that the NLRA’s definition of who is an
employee protected by the
Act does not include supervisors. A supervisor is defined as
“any
individual having authority, in the interest of the employer, to
hire,
transfer, suspend, layoff, recall, promote, discharge, assign,
reward, or
discipline other employees, or responsibility to direct them, or
to adjust
their grievances, or effectively to recommend such action.” In
addition,
the supervisor must use independent judgment in the exercise of
such
authority and cannot act in merely a routine or clerical nature.
Although supervisory employees are not covered by the NLRA, most
HR
experts agree that you should not implement or enforce a policy
prohibiting the discussion of wages among workers, regardless of
supervisory status. There are two reasons for this advice: (1)
the lack of
trust and secretive atmosphere created runs counter to good
employee
relations, even if only applied to supervisors; and (2) the
policy may be
misapplied to nonsupervisory employees in violation of the NLRA.
Further, you also should be aware that some states, including
California
and Michigan, specifically prohibit employers from forbidding
employees
to discuss compensation among themselves, from requiring
employees
to sign agreements not to disclose their wages, and from
retaliating
against employees who do disclose their wages.
As an alternative to a prohibition, consider adding a policy
statement to
your handbook that encourages employees to direct questions or
concerns about compensation to the human resources department or
their department head. (Download
free Pay Procedures model policy.)
Although this policy will not prevent employees from talking
about their
pay, at a minimum, it may encourage them to bring their concerns
to you
instead of their coworkers. |
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Subscribers to the
Personnel Policy Manual and HR Policy Answers on
CD can find more information on the NLRA and restrictions on pay
discussions in Pay Procedures, Chapter 305, note 16.
Not a subscriber? If you would like to order one of our policy
chapters,
go to:
http://www.hrpolicyanswers.com.
If you have any questions, please call us at 1-800-437-3735. We'll
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happy to help you. |
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