Many companies at one point or another have experienced the negative impacts of “water cooler talk” on staff morale and productivity. To alleviate the effects of employees discussing their wages, many companies enforce a policy prohibiting discussion of wages. However, if you are a private sector employer in America, a policy prohibiting discussion of wages is a violation of the National Labor Relations Act (NLRA), which provides employees the right to discuss the “terms and conditions of employment” with one another, including their wages, benefits, etc. This right applies in both union and non-union settings, as well as on social media platforms.
Per the National Labor Relations Board (NLRB):
In its decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), the Board reassessed the standard for when the mere maintenance of a work rule violates Section 8(a)(1) of the NLRA. The Board then established a new standard that focused on the balance between the rule’s negative impact on employees’ ability to exercise their Section 7 rights and the rule’s connection to employers’ rights to maintain discipline and productivity in the workplace.
With respect to confidentiality rules specifically regarding wages, benefits or working conditions, the Board held that these rules are generally unlawful because they could prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule.
In summary, most discussion of wages and benefits will likely be protected and concerted. There are few legitimate interests in banning employees from discussing wages or working conditions that are sufficient to overcome Section 7 rights.
Per the Texas Workforce Commission:
“Employees discussing their own information are protected, as are employees discussing the pay and benefits of others if they obtained that information through ordinary conversations with others”, the Commission noted. “However, if in order to get the pay and benefits information they discuss with others they access offices or files known to be off-limits to them, or cause others to break access restrictions and give them confidential information, and the company has clearly taken steps to restrict the information and uphold its confidentiality, then they may well find themselves unprotected by the NLRA.”
What can an employer do to avoid the downfalls of these problematic conversations? Prohibiting employees from discussing compensation generally remains unlawful. The best way to alleviate these problems is to maintain a strong culture of equitable and transparent compensation practices. Encourage employees to approach management or the Human Resources (HR) Department with questions or observations about salaries and/or working conditions. HR can assist employees with understanding salary ranges and job potential, provide resources and training for management, and develop and maintain a grievance procedure for the company to ensure employees are heard. If appropriate, an employer may consider conducting an Employee Engagement Survey to monitor the company’s culture, employee engagement and the overall perception of compensation and benefits.
For more tips on addressing concerns in the workplace or conducting an Employee Engagement Survey, please contact HR Partners at 785-233-7860. In addition, we would be pleased to assist you with any other HR matter your business may need guidance with.
Memorandum GC18-04, Office of the General Counsel, National Labor Relations Board (June 6, 2018)
Unfair Labor Practices: Can an employer in a nonunion facility prohibit employees from discussing their salaries? (September 27, 2017). Retrieved June 4, 2019, from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/prohibitdiscussingsalaries.aspx