As Ledbetter Fair Pay Act Debate Heats Up, NLRB Reiterates It’s Illegal to Bar Employee Discussion of Compensation

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In recently discussing the Ledbetter Supreme Court case on the time limits for filing compensation discrimination charges, and Congressional efforts to alter its result, I mentioned, in passing, the NLRB (National Labor Relations Board) position on rules against discussing compensation.

This is significant because Justice Ginsburg’s Ledbetter dissent, and the reform advocates, assume that the fellow-employee compensation information that may support such discrimination charges is so top secret that employees are typically unable — for periods well in excess of the normal charge-filing limits — to learn whether they are being paid unfairly relative to similarly-situated peers.

I’m not saying there isn’t some truth to this; clearly many people consider their pay to be personal information and choose not to disclose it.

But many people are also opposed to pay discrimination and may be motivated to disclose such information if they understand the purpose is to ferret out and remedy possible discrimination. They may, however, be concerned that doing so would violate the employer’s confidentiality rules.

It is thus particularly significant that the NLRB recently issued a decision reaffirming its position on rules prohibiting or chilling employee discussion of compensation and benefits.

The Unlawful Rule

In Windstream Corp., 6–CA–35483 (May 23, 2008), the employer had a rule providing:

Employee compensation, benefits, and personnel records and information are confidential.

Only employees who need to know such information in the course of employment should access such employee information.

You should not disclose this information to any other Windstream employee unless that employee has a need to know such information in the course of employment.

Except as required to comply with law, you should never disclose this information to any party other than the employee or individual whose access has been authorized by the employee.

The Lawful Revision

After the NLRB charge was filed, the company changed the policy, adding a sentence clarifying that:

This does not prohibit you from disclosing or discussing personal, confidential information with others, so long as you did not come into possession of such information through access which you have as part of your formal Company duties.

The NLRB held that the original rule was unlawful, but as modified it was lawful. However, the modification had been inadequately communicated, so it ordered the company to give notice of the modified rule to employees in an e-mail from the COO, as it did with the original rule, specifically pointing out the changes.

The Applicable Standard

The NLRB stated the law as follows:

[A]n employer rule which regards employee compensation and benefit information as confidential and prohibits employees from discussing such information with one another violates Section 8(a)(1) of the Act. . . .

In examining whether a particular rule so violates Section 8(a)(1), the Board’s analysis requires that the rule be such that “Employees would reasonably construe the language to prohibit Section 7 activity.”

The original Rule’s Overbreadth

Applying this principle to the company’s original rule, the NLRB said:

Clearly this language is so broadly stated that employees could and will construe them to prohibit discussions of wages and working conditions with others. . . .

Moreover, it should be noted that the cover letter . . . accompanying issuance of the . . . guidelines included an admonition that a “zero tolerance” disciplinary policy would be applied to any violation of the policies, thus, imposing an even greater chill on employees’ exercise of the Section 7 communication rights in this regard.

Such overly broad confidentiality rules are quite common — perhaps one of the most common violations of the National Labor Relations Act.

It is important to note that the employee-communication rights involved are by no means limited to union-represented employees.

Bringing employee compensation out of the dark may be a fearful thought to many companies. But if a fair and well-justified compensation system is in place, it should not be a problem.

Photo credit: Willow&Monk via flickr

Related Posts

• Senate Blocks Ledbetter Fair Pay Act
• Is Ledbetter Fair Pay Act Needed?
• Hush, Money . . . NOT: It May Be Illegal To Prevent Your Workers From Discussing Their Salaries
• Lilly Ledbetter Fair Pay Act Signed by President Obama
• The Employee Free Choice Act: The Debate Heats Up
• So How Do You Design a Fair Compensation System?
• No union, no worry about NLRB? Not so fast. . .

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