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Employees comparing pay? Don’t try to muzzle them

by on
in Employment Law,Firing,HR Management,Human Resources

Issue: About a third of all organizations prohibit employees from discussing pay with one another.

Risk: Such confidentiality policies likely violate federal laws and possibly state statutes, too.

Action: If you operate on a no-pay-talk policy, dump it.

You may think you hold good reasons for banning workplace chitchat about salaries: Such discussions can hurt morale and raise questions of fairness.

A recent HRnext online poll found that more than one-third of the 361 HR people surveyed said their organization prohibits pay discussions among employees.

Our advice: If you have such a policy, drop it. If you don't, don't write one.

A blanket pay-confidentiality policy likely violates the National Labor Relations Act (NLRA), which protects employees on pay issues. And it also could violate state law.

Federal case: The U.S. Equal Employment Opportunity Commission won a $280,000 settlement for six Pittsburgh women who were fired after they compared paychecks and complained that males were paid more.

State case: A California nursing home was dragged into court after firing its marketing director for discussing her department's bonus structure with other organization employees.

She sued, alleging wrongful termination, and a federal appeals court let her case go to trial.

The nursing home argued that she was employed at will and could be fired for any reason. But most states recognize exceptions for firings that violate a "public policy" in state law or court rulings. And California law has a specific public policy that forbids discipline against "an employee who discloses the amount of his or her wages." (Grant-Burton v. Covenant Care Inc., No. B151342, CA 2/1, 2002)

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