A reader writes:
At my current employer, we’re being asked to sign a new legal agreement before they’ll process our bonus checks. One thing in the paperwork that caught my eye was this clause:
“1. Confidential Information. Both during and at all times after termination of my employment with the Company for any reason or no reason, I shall not use, disclose, publish or distribute to any person or entity any Confidential Information except as required for performance of my work for the Company or as authorized in advance and in writing by the Company. For purposes of this Agreement, ‘Confidential Information’ means … any information regarding my compensation or the details of my benefits package with the Company.”
First off, I’m wondering if this would apply to something anonymous like Glassdoor.com? Second (and I know this is asked a lot with usually the same answer)…is this legal? Articles like this one make me wonder if the NLRA applies in this case.
The National Labor Relations Act says that employers cannot prevent employees from discussing wages and working conditions among themselves. The idea is that employees need to be free to organize, and preventing them from discussing these topics would prevent them from organizing.
(There are some exceptions to this though. An employer can prohibit these discussions from taking place during times when people are supposed to working. And while employees can freely share information about their pay with other employees, they wouldn’t be protected by the law if they obtained information about other employees’ pay through files known to be off-limits to them or if they get others to break access restrictions and give them confidential information. In other words, Tom can tell you how much he makes, but getting the bookkeeper to tell you how much Tom is making wouldn’t be protected by the law.)
However, the law only applies to discussions within the organization. An employer can prohibit employees from discussing salary outside the organization. So yes, anonymous posts on GlassDoor would be a violation of the policy, if they were able to trace the post back to you.
There’s an upside to this policy though: The next time you’re interviewing and an employer asks about your salary history, you can truthfully reply that your company prohibits you from sharing salary information externally.
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So you can’t technically tell your own spouse how much you make? Do you have to ask permission to fill out applications that require your income, like a loan or fafsa?
Technically, under the terms of the contract, I would expect yes. Of course, I would want to know how much more your compensation would be for the inconvenience.
Their answer, I would imagine would be that you still have a job.
The law allows for commonsense exceptions, like the sorts of forms you’re talking about, your accountant, your spouse, etc. But it does allow companies to consider their salary structure to be a trade secret and something they can prohibit being released outside the company, to competitors, etc., and courts have upheld that.
Guess I should have refreshed before posting–thanks for the clarification.
That’s a good point. The OP should ask them for clarification on the matter, because income information would be required to purchase a house, rent an apartment, get a car or student loan, get a new credit card, etc. I’m am also guessing a judge in any child support hearings or divorce settlement hearings would want to know the salary as well, but I have no experience with that! I would not want to have to go to my company to get “permission” to do these things.
Also, while it would be great to refuse to disclose your current salary at future job interviews, some companies may not hire you without it.
Honestly, if this company expects you never to, without their permission, get a car loan, buy a house, or rent a new apartment while employed there, and wants to make it difficult for you to find a new job, I would start searching for something different now.
How common is this practice? I don’t think I’ve ever come across such a policy before.
We have this same policy at my company. My best friend works here, too, and we have never discussed how much we each earn. We do have different kinds of jobs, and she has a little more seniority than I do, so I would expect that she’s bring home more money every month.
One guy was fired last year for snooping in other employee’s pay envelope. I’m not sure if it was for snooping, or for learning how much this other person earned.
AaM, your answer doesn’t make sense to me. If one is able to discuss salaries amongst other employees for the purposes of organizing, why wouldn’t you be able to discuss it with the union representative?
Away from the legal issues, I’m really tired of this attitude that salary should be kept secret. First of all, it’s the best way to hide discriminatory pay practices. Secondly, when everyone knows what everyone else makes and what it took to get to that point (in terms of skills, experience and the like) then employees have a clear example of what is expected of them and what they can do to earn more money.
I’m just telling you what the NLRA allows, not whether it makes sense :) But I do think “union reps” are included in the exceptions.
On sharing salary info: Here’s an article by the Evil HR Lady that you’ll probably like: http://www.cbsnews.com/8301-505125_162-44942255/what-if-you-knew-everyones-salary/
No worries, I don’t blame you for the state of labor law :p
My company actually publishes useful salary ranges for just about every position/grade/location. It turns out that we all still act like adults!
I confess that I see both sides of this issue.
We know salary differences/inequities happen for all sorts of reasons: when an employee joins and what the hiring salary ranges are at the time; differences in how bosses appraise their employees; internal transfers from other departments; acquisitions; locational differences… Oh, and actual performance, of course.
Couple this with wage freezes that many companies have had in place over the last few years, and those inequities don’t get fixed. Will employees “get” it? Anecdotal evidence is mixed. I think, or delude myself into thinking, that most would handle it well enough. I know a couple of people who absolutely don’t want to know what others make because they know it will bother them. I know a couple who would be angry to know what so-and-so is making because personal animosities would override logic. Really, that’s the last thing I need. Money does strange things to people.
On the other hand, would making salaries public within the enterprise force the money to flow so we could address the real inequities? I don’t know. Certainly it’s possible. Is there much evidence that this has worked?
Well I work for a company of hundreds of thousands and it’s not an issue. Like I said earlier the ranges for all positions are openly known, and folks who are on the same tier generally know in great detail how much others make.
We have open discussions about it as well, and there’s no bitterness or infighting because the reasons for different wages are due to experience and skills and the like. The companies who hide this information for their employees are simply playing games or don’t respect the maturity of their employees – which makes me wonder why they were hired in the first place.
I mean think of it like this: we’re all swimming neck deep in proprietary information at work. Why would a company trust me with that, but not trust me to know how much the guy next to me is making?
Oh, and if you want to be even more baffled, I can add that the NLRA’s prohibition on preventing these discussions only applies to non-supervisory employees.
Ok wait so there’s a law that says “employers” can’t prevent workers from sharing pay information with one another BUT the “employers” who are so prohibited are defined as non-supervisors?
Am I reading that right or has 14 hours of science homework fried my brain?
No, it means that an employer cannot prohibit non-supervisors from discussing salary.
OIC Gotcha, thank you for that clarification. I was having trouble wrapping my head around that.
Interestingly, most places I have worked have had written prohibitions against employees disclosing their pay to another employee. The only place I did not have that was working for a large company that had set pay scales with pay rates per scale.
Yeah, it’s definitely common. It’s one of those things that happens all the time despite the law.
Union reps are typically fellow employees.
“at all times after termination of my employment with the Company for any reason or no reason”
Really?? Do they really expect a former employee to not disclose their salary somewhere? I know this is just boilerplate lawyer BS and I don’t really think it would *actually* be enforceable anywhere as unscionable but I’m not a lawyer and don’t play one on tv.
This is actually not uncommon. And saying that your former employer prohibited you from disclosing salary is generally an effective way of getting new employers to back off from demanding it.
Doesn’t work so well on those online application forms which require it, though….
Leave it to the English major to point out, but isn’t this a Catch-22? Employers request salary information (almost forcefully so) yet job applicants can rebuff the request with a legally approved (in some cases, mandated) response that another employer is prohibiting the release of that information?
Does anybody else see the “round-robin” quality of this, or is it just me?
Anyway, what I’m curious about, is why everybody just doesn’t respond that their previous employer wouldn’t allow such information to be divulged thus negating the point of the question?
Also AaM, I loved the article you responded with by Evil HR Lady. I have to say I agree; knowledge is power, even in the case of salary.
Well, why not post (obviously anonymously – always use an open, public WiFi hotstop and your personal laptop, which never goes into work) a salary 20-30% lower than your actual one on Glassdoor? And be generous, and do a similar thing for a few of your co-workers as well (if you don’t know their salaries, guess, and then subtract the same percentage).
I’m confused about what the point would be of doing this.
For fun, maybe? Arguably, it could even help the company at the next round of salary negotiations, since they could then point to your statements that such sites have too-high salaries.
Right, it’s not in employees’ best interests.
Still could be fun to do – just wait until after you’ve left the company. In the long run, it will hurt the company, since they’ll acquire a reputation of under-paying people.
It’ll also potentially discourage someone from pursuing a job that could be great for them. It would be a needlessly crappy thing to do.
If they thought the job was perfect for them, what would prevent them from applying on the assumption they could negotiate the salary upwards?
This is so ridiculous and petty.
An employer can prohibit these discussions from taking place during times when people are supposed to working.
This isn’t 100% accurate, actually. If there is some kind of business/safety reason that people are prohibited from discussing all non-work info, then yes. But, you cannot allow your employees to talk about, idk, football or weddings, and disallow them from talking about wages or working conditions or unions.
Actually, I believe employers can restrict employees from talking about non-work related things like football and weddings during working hours without a “business/safety reason.” Most don’t because it would be pretty draconian and kill morale, but they can. You’re there to do a job, not socialize.
Yes, you’re right, they COULD ban all non-work conversations, though few companies do for the reason you mention. I may not have been clear! What I mean is they cannot have a policy that says “you can talk about football and weddings but not working conditions or unions.” And they cannot have a policy that says “no non-work conversations at all period” but then only enforce it with regard to working conditions and unions, and then let it slide when people talk about weddings and football.
Or, to put it another way, they can’t restrict people from talking about working conditions or unions even with a policy that pretends they’re doing something else.
Exactly — you can prohibit non-work-conversations in general, including salary talk, when people are working. But you can’t JUST ban the salary talk.
Is this a government job? I could see this being put into writing with certain government jobs.
Can’t be because all gubment jobs have their pay rates posted as public information.
Most do, but not all of them…
I am not in the US and thus not familiar with US law, but doesn’t a contract tend to become invalid when it is terminated? How are the terms of the contract (that relate to you) enforced after you leave a job, if they are not offering you their side (your salary) in return?
Contracts around confidentiality typically don’t end when employment ends, so they continue to be enforceable — just like, say, a non-compete clause, which by definition doesn’t even start to apply until employment is terminated.
I just filled out an application and they required salary info. I was honest and I forgot that that could be part of my nondisclose agreement. Could my former employer find out somehow?
Very unlikely.
But isn’t the point of this policy to stop other employers finding out the payscale at the original company?
You kind of give the prospective employer a clue about your past salary when you state your current salary requirement for him.
At my company, we can be fired for discussing our salaries WITH EACH OTHER.
That’s illegal and could be challenged if someone wanted to.
Isn’t it only illegal to prohibit non-supervisory personnel?
The NLRA has a very specific definition of supervisor, so even if no one reports directly to you, you may be lumped in depending on your duties to discipline or direct work.
Even though Alison is right in it being illegal to prohibit it, personally if you aren’t planning to go to court over this I wouldn’t do it.
This is a very touchy thing most places, and personally I wouldn’t stir up that hornet’s nest if I wasn’t planning on leaving.
Oh, I’m planning on leaving–stirring up stuff is just not what I do, though. I just want to get out of here.
Wow. I had no idea, but I WILL say I’m not surprised.
Jamie, thanks for also chiming in. I don’t plan to go after them for it. I just thought it was kind of weird.
I honestly don’t care if my coworkers know what I make or not, but I can see why an employer might not want people discussing it. It is also possible that I misunderstood the policy when I first read it. I need to go back and check.
This is a slightly different question, however it just happened at my office. Does an employer have the right to disclose your pay structure to everyone?
There are about 30 poeple in my position and then we have about 400 employees total. My position just changed our pay structure due to reimbursement issues (aka a pay cut), and my employer released my new pay structure and how much I am going to earn to everyone in our organization.
This seems unethical at best, but I am unsure as to the legality of it.
Yes, it’s legal. It’s somewhat odd if they only released your pay information and not anyone else’s though. Was there some reason that your position was the one that had the info released?
I was wondering if there is something “faux-pas” legally about your boss saying “I gave you a bigger raise and bonuses then everyone else…” in front of fellow employees at a meeting? It just seems wrong to out your employees’ earnings like that. Am I just over reacting?
Michael
Legally, no issue. But certainly not wise.
It basically means dont tell your coworkers how much you make. because if you get paid more then others or vice versa people will say its unfair.
with the new legislation passed requiring equal pay for both men & women in the workplace. How am I going to find out if I am being underpaid or discriminated against . Unless my employer is required to turn over a list of all employee names (or a random number) & how much they make to any current employee if requested in writing
if you tell me it’s Against company policy to discuss salary (a Firing offense) with other employees. or if you give a salary range – (this job pays $30k – $45k a year) how do I know how men & women fall on this scale?