Can An Employer Prohibit Employees From Discussing Their Wages With Each Other?

• Jurisdiction: United States,Federal,New York
• Law Firm: KI Legal
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Employee Rights/ Labour Relations
• Author: Mr Steven Siegler and Matthew McCarthy
• Published date: 03 July 2023

Employers have an interest in reducing the potential conflicts which may arise due to their employees openly discussing their wages with each other. To avoid these conflicts, some employers have enacted, or considered enacting policies - either written or unwritten - to prevent employees from discussing their wages. What kinds of policies prevent employees from discussing their wages? These policies are typically referred to as "pay secrecy" or "pay confidentiality policies," and they most likely run afoul of the National Labor Relations Act ("NLRA") and the pay equity provisions of the New York Labor Law ("NYLL").

It has long been federal public policy that employees have the right to communicate with other employees at their workplace about their wages. Section 7 of the NLRA gives employees the right to make efforts to organize and discuss the terms of their employment, including pay and benefit information.¹ Section 8 of the NLRA further reinforces employees' rights by making it an unfair labor practice to violate Section 7 rights, thereby making an employer's policy that prohibits salary discussions unlawful.²

Appellate Courts, including the Second Circuit Court of Appeals, have consistently upheld administrative orders against employers who institute a restrictive policy on wage discussion. In NLRB v. Vanguard Tours, Inc., for example, the court upheld that an employer's "rule prohibiting employees from making statements concerning wages" and other terms of employment constituted an unfair labor practice.³ Further, the court in Lowes Home Centers, L.L.C. v. National Labor Relations Board held that an employer's policy requiring employees to maintain confidentiality of information entrusted to them by the company-including wage and hour information-would reasonably be construed to restrict employee's ability to discuss wages, constituting an unfair labor practice under the NLRA.⁴ In defending its policy, Lowe's said the rule applied to individuals entrusted with non-public information about Lowe's business and was intended to, among other things, ensure compliance with anti-trust laws; the company claimed it did not prevent employees from discussing salary information with each other.⁵ The judge disagreed, finding that the policy applied to all employees, and interfered with their NLRA rights to discuss the conditions of their employment.⁶ The policy was overly broad and was not tailored to address only those employees with special access to...