Loose Lips

State and federal laws give workers the right to freely discuss salaries.

Are you annoyed, embarrassed or angry when Driver A pulls you aside in the office hallway and wails about how Driver B with comparable longevity is making more money than he is?

Lots of things get talked about in the workplace — who looked best on “American Idol,” who left the visiting team's best player open for the game-winning shot, who needs Botox — and who in the company is getting paid how much.


Many companies forbid their employees from discussing pay and bonus information. Employers want to limit or ban discussion about wages because workers tend to jump to the wrong conclusion, leading to comments like “the company is discriminating against me” or “my contribution is not valued here.”

The fact is, a lot of factors go into what an individual is paid. A woman who discovers that a male colleague doing similar work is earning $10,000 more than she may respond with a gut reaction about discrimination. She may be unaware of his having considerably more experience or an advanced degree.

However, last year, Colorado Gov. Bill Ritter signed the Wage Transparency Act, which gives employees the absolute right to discuss their wages with others. The new law, which took effect in August, provides that it is unlawful for employers to “discharge, discipline, discriminate against, coerce, intimidate, threaten or interfere with any employee or other person because the employee inquired about, disclosed, compared or otherwise discussed the employee's wages.” In addition, employers no longer can require workers to sign confidentiality or non-disclosure agreements that would deny employees the “right to disclose” their wage information. California and Michigan also prohibit employer limits on workers' talk about earnings and salaries.

The Wage Transparency Act does not apply to employers, including federal and state governments, who are exempt from the provisions of the National Labor Relations Act (NLRA). The NLRA is commonly understood to deal with unionized workplaces. However, the act, as interpreted by the National Labor Relations Board (NLRB), regulates matters affecting both union and nonunion employees.

State laws that regulate conduct and activities that fall within the scope of the NLRA are preempted by federal law. Last year, the NLRB ruled that restricting the ability of an employee to discuss his or her wages — or other terms and conditions of employment — with others amounted to an unfair labor practice under the NLRA. [Northeastern Land Services Ltd., 352 NLRB No. 89 (June 27, 2008)]

As a result, states may not be able to legislate on this NLRA-regulated employer activity, and the Colorado law and other wage transparency may be invalid. However, the effect is the same: company rules stifling employees' salary discussions are in trouble.

Barry Shanoff
Legal Editor
Rockville, Md.