Whenever I get a new job, I take one evening off from everything and I read the employee handbook, sifting through the legalese in search of opportunities. If I can find any fringe benefits — retirement savings match, cell phone discounts, etc. — I am going to take advantage of each and every one. Everyone gets excited about a new job, but not everyone makes a holiday out of the ritual reading of the handbook.
There have been multiple occasions where an employee handbook I read specifically prohibited any sort of discussion of my pay rate with any of my fellow employees. This was generally seen as a pretty high level offense, something that could get you fired. I can’t remember many times in the couple of decades I’ve been working where I could afford to be fired or even laid off for even a couple of weeks. I toed the line and I kept my job and I thought I was the better for it.
We’ve talked about how many people don’t even know they could be claiming the Earned Income Tax Credit (EITC) and getting loads of money back come tax season. Well, now we need to talk about another issue people are not aware of, the fact that it is illegal for your employer to prevent you from talking about your wages with other employees. Enforcement of said “gag rules” are in direct violation of multiple federal and state laws. I thought it might be a good idea to delve deeper into this topic.
Different employees are protected under different laws. For the majority of private employees, excluding
any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act [45 U.S.C. 151 et seq.]*, as amended from time to time, (29 US Code § 152)
protection is granted according to the National Labor Relations Act of 1935 (NLRA) which is also know as the Wagner Act after New York Senator Robert F. Wagner. The specific clause that protects an employee’s right to discuss wage information with fellow employees is § 157:
Employees shall have the right to… engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…
Employers who get in the way of any of these rights are guilty of Unfair Labor Practices (ULP) and subject to corrective actions administered by the National Labor Relations Board (NLRB). The wording within the NLRA does not make it obvious that the Act protects your right to discuss your wages, but subsequent rulings of the NLRB have clarified the issue. Employers cannot distribute or reinforce policy forbidding wage discussion (Service Merchandis Company, Inc. v. Priscilla Jones, 1990), discourage wage surveys (Texas Instruments v. Internetional Union of Electrical, Radio and Machine Workers, AFL-CIO, 1980), fire employees who copy and distribute payroll data (Brookshire Grocery v. Mark Moise, 1989), fire employees who discuss wages (Ambriola, Co. v. Unnamed Charging Party, 2011), or decline rehire for employees who discuss wages (Custom Cut, Inc v. Southwest Regional Council of Carpenters & Joiners of America, 2003).
Between 1982 and 2014, ten states passed legislation against “wage secrecy.” These states includeCalifornia (Labor Code, Section 232), Colorado (Senate Bill 08-122), Illinois (ST CH 820 § 112/10),Louisiana (“Louisiana Equal Pay for Women Act” – Chapter 6A of Title 23 of the Louisiana Revised Statutes of 1950), Maine (Chapter 29, S.P. 33 – L.D. 84, An Act to Ensure Fair Pay), Michigan (Mich. Comp. Laws Section 408.483a), Minnesota (Ch. 239 – H.F. No. 2536), New Hampshire (S.B. 207; Title XXIII, Chapter 275), New Jersey (Title 10. Civil Rights, Sec. 10:5-12), and Vermont (Title 21 (Labor), Chapter 5 (Employment Practices), Sec. 495 (Unlawful Employment Practices). I’m proud to say that my home state of Michigan was the first to adopt state legislation to protect wage discussion, and less proud to find that my three adopted home states of Ohio, New York, and Texas are nowhere to be seen on this list. The Louisiana Equal Pay for Women Act has a limited scope —
This Act applies only to any department, office, division, agency, commission, board, committee or other organizational unit of the state.
— but to my knowledge each of the remaining state laws applies to all employees within the state save for federal employees and those private employees excluded specifically by the NLRA.
Finally, President Barack Obama’s Executive Order — Non-Retaliation for Disclosure of Compensation Information establishes the right of employees of federal contractors to inquire about, disclose, or discuss their compensation with fellow workers. President Obama was quoted as saying:
Pay secrecy fosters discrimination and we should not tolerate it, not in federal contracting or anywhere else.
The Paycheck Fairness Act (S.2199 — 113th Congress (2013-2014)) is a proposed bill that would presumably broaden the net of employees covered by such laws as NLRA, the various state laws, and Obama’s executive order, but we won’t know the details until some form of this bill is actually passed into law. In recent years, similar labor bills have experienced a great deal of resistance from Republican legislators and Republicans currently control both the Senate and the House of Representatives. In other words, it may be a while before anything resembling the Paycheck Fairness Act is signed into law.
There are certainly some holes in the framework for many federal employees, most state and local employees, and a few subgroups of public sector employees, but I wouldn’t be surprised if everyone (or next to everyone) reading this article is protected by some statute or another and most likely the NLRA.
THE REAL WORLD
Most of us feel like the employers are winning. In recent years there have been more limitations than enhancements to a person’s right to collective bargaining passed. This is largely because of union corruption in past decades, but it removes some of the vital checks and balances that exist in favor of the employee. Henry Ford and John Maynard Keynes both predicted increases in productivity and decreases in the work week for the current generation. Their predictions for productivity have been spot on, but the resulting decrease in weekly labor has not followed, and economic inequality is being pointed to as the source of the discrepency. All additional profits from increased productivity have gone right back to the owners rather than being distributed to the labor force. We are thinking bigger about solving the world’s economic issues, but severely lacking the government and private industry support of previous generations.
I’m not going to split hairs about the issue of gag rules regarding employees sharing wage information with one another. Whether purposely or accidentally, people are getting paid less to perform more work because we do not talk about our wages. This is yet another method by which wealthy individuals continue to get wealthier while the median income either stays the same or decreases. I’m not going to fault the people of this country too much. I have seen my fair share of movements for wage equality over the years and I’ve seen a decent amount of bills signed into law as well, and yet wage privacy policies tend to harm women and people of color at much higher rates than anyone else. It is bad for everyone if our employers are able to constrain us from discussing wages, and it is much worse for minority groups who have already drawn the short straw on so many other issues.
How are employers able to get away with laws that discourage the discussion of wages?
Some are suggesting that the NLRB is not particularly tough on employers who break the rules. I cited a decent amount of cases where the NLRB took employers to court and ruled in favor of the employees, but the “punishments” for employers rarely go further than reinstatement of employees for wrongful termination, awarding employees back-pay for periods of unemployment, or posting notice in public places promising not to violate the law. I covered a couple labor disputes while I was a reporter for a local newspaper a few years back, and if justice was served it was certainly cold when it got to the table.
The main issue, however, is that most of us do not know our rights. As mentioned earlier, the IRS has amazing refunds like the Earned Income Tax Credit (EITC) and the Child Tax Credit available to poor people, but because they can’t afford accountants and the US tax code is complicated many people are not taking advantage of these credits. Similarly, most of us do not know that we have the right to disclose our wages to fellow employees under federal and in some cases state law. I would say that the majority of people I know are not aware that their right to discuss their wages is protected, and this reflects studies which suggest that well over half of private employees in the US believe their employers have the right to tell them no. In many cases, employees believe the right to discuss their wages is reserved for union affiliated employees only, not for the rest of us. This, like many of the other lies circulating about labor, is untrue, and these untruths have circulated at such a rate that I might just start believing someone is spreading them on purpose.
If you have been discouraged from sharing wage information with co-workers either verbally, if you have been fired or denied rehire for talking about your pay rate, or if there has been any other form of retaliation for discussing how much you make, your first recourse should be to contact your regional office of the NLRB and file a complaint. If more people assert their rights there might be enough political capital for the NLRB to give harsher penalties to employers.
If your state is not one of the ten listed above, then you need to start protesting to get extended protection where you live. Get in your state legislators’ faces and don’t give up until the people of your state are protected. Feel free to use the NLRA and the laws of the states above as precedents and say, “I’ll have what they’re having.”
We can all try to get further federal protection, but that is going to be an up hill battle. Congressional Republicans tend to oppose legislation such as this, and the GOP is currently in control of both the Senate and the House of Representatives. Regardless of your personal political leanings, if you want labor protections you would probably benefit from a House of Representatives with more Democrats in it. That is how you pass a law like the Paycheck Fairness Act. A Democrat majority House is also the one condition required for me to be comfortable with a Republican President, but that is neither here nor there.
For those of us who are already protected by this law, we can pose a demonstration. I’m still in the market for a better name, but for the time being we can call it Paycheck Coming Out Day. A large group of people plans a day where everyone goes to work and shares their wage information. We would be armed with the right information, like what laws protect us, what precedents exist, and what we can do if our leadership retaliates in any way. I love using this blog for good purposes, but an actual demonstration would go a lot further toward disseminating information regarding labor rights. If anyone is interested in going through with this, drop me a line. I think it could be really fun, informative, and it would be in the service of justice, which is also a bonus.
Pay secrecy leads to pay discrimination, which further exacerbates income inequality. I don’t need to talk about what problems income inequality create. I just have to check the “All of the Above” box and leave it at that. I listed some ideas for action above, but I am all ears if you have your own ideas.
* The Railway Labor Act applies to employees of freight and commuter railroads, airlines, and companies directly or indirectly controlled by carriers who perform services related to transportation of freight or passengers. The purpose for the legislation was to prevent work stoppages that would cripple interstate commerce to the extent that people would be denied essential transportation services.