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Can Employees be Fired for Discussing Pay Rates?
If your company prohibits or discourages employees from sharing pay information, you may be breaking the law. Here's why.
Most people would consider sharing their pay information as taboo. But if an employee were to discuss their pay rate or salary level with fellow coworkers, could they be fired? The short answer: no. Here’s why.
The NLRA protects an employee’s right to discuss wage information
In 1935, Congress enacted the National Labor Relations Act (NLRA) to protect the rights of workers. Although many companies believe the NLRA only applies to companies with unions, the NLRA actually protects all employees that work for any business entity.
According to the NLRA, employers cannot limit employees’ concerted activities (or, in other words, the ability for employees to discuss their work conditions with others) for the purpose of “collective bargaining or other mutual aid or protection.” While a little ambiguous at first, the National Labor Relations Board (NLRB), which enforces the NLRA, has ruled in several cases to clearly define the discussion of wages as “protected, concerted activity.” For example:
- 1980: The NLRB ruled that employers could not prohibit employees from discussing wages with non-employees because it substantially interfered with their organization efforts. (Texas Instruments v. International Union of Electrical, Radio and Machine Workers, AFL-CIO)
- 1989: The NLRB ruled that an employee who came across confidential pay information – who then copied it and distributed it to fellow employees - was protected because the employer had violated the NLRA by prohibiting employees from discussing wage rates. (Brookshire Grocery v. Mark Moise)
- 2003: A company was found in violation of the NLRA when it refused to rehire two men because, as former employees, they had discussed their wages with coworkers (Custom Cut, Inc. v Southwest Regional Council of Carpenters, United Brotherhood of Carpenters & Joiners of America)
- 2011: An employer fired a worker for discussing merit pay increases after specifically prohibiting employees from discussing the increases, which was in violation of the NLRA. (Ambriola, Co. v. Unnamed Charging Party)
Although the NLRA does allow employees to freely discuss their work conditions such as pay, benefits, and workplace safety, it doesn’t protect malicious or reckless behavior. So, for example, if an employee were to post confidential trade secrets on social media, which is in violation of company policy, the worker would justly face disciplinary action pending an investigation.
Employers should periodically review their employee handbooks to ensure they are up-to-date and do not have language that could be interpreted as a violation of the NLRA. Please contact your Status.hr Rep at HR@stratus.hr for more information about employee rights and/or to receive a professional review of your handbook .
An employer may be at risk just for getting upset about employees sharing wage information!