When employees find out each others’ salaries, it often causes morale problems. Managers often discourage those situations — but HR needs to warn them of the legal dangers in doing that.
In one recent case, an employee was fired for violating a policy on keeping salaries confidential.
The company provided temporary staffing services to clients. An employee had a complaint about his paycheck, and he took the issue up with the client he was working for at the time.
He was fired. A policy in the company’s handbook read: “The terms of this employment, including compensation, are confidential … Disclosure of these terms to other parties may constitute grounds for dismissal.”
The employee took the company to court, claiming the policy violated the National Labor Relations Act (NLRA), which gives employees the right to freely discuss their working conditions with each other or representatives from a union.
The employer argued that the intention was simply to keep the info away from people outside the company. But the court didn’t buy it. The policy was written too broadly — a reasonable employee could interpret it to ban discussions with co-workers and union representatives.
The company was forced to eliminate the policy, reinstate the employee and give him back pay.
Cite: Northeastern Land Services, Ltd. v. N.L.R.B.
