At non-union Jerry’s Home Improvement in Eugene, employees
knew the rule: Don’t discuss your wages with co-workers. Such
rules are common in workplaces throughout America. They’re
Under the National Labor Relations Act, sharing information about
wages, benefits, and working conditions is a protected right, even
in nonunion workplaces. But few employers or employees know that.
Richard Ahearn, Seattle regional director for the National Labor
Relations Board (NLRB), thinks many nonunion employers have policies
discouraging or prohibiting co-worker wage discussions. Ahearn’s
agency administers the National Labor Relations Act. Most people
who are familiar with the Act know that it spells out workers’
right to unionize. But it also protects workers’ right to
“engage in … concerted activity for mutual aid or protection.”
And that includes discussing wages.
Trouble is, in most nonunion workplaces, there’s nobody
there to inform employees of their rights, Ahearn said. It’s
a rare worker who knows that it’s illegal for an employer
to ban wage discussions. It’s even rarer for a worker to report
it. Employees are normally named when they file charges with the
NLRB, so their employer knows who filed the charge.
At Jerry’s Home Improvement, the no-discussion-of-wages
rule was challenged by a former employee, Marshall Lampkins, who
had been fired for other reasons.
The “Pay and Compensation Confidentiality policy”
in the Jerry’s Team Member Orientation Handbook was plainly
illegal. “Team Member pay rates and compensations are confidential
and are not to be discussed or compared among Team Members,”
the handbook stated. “How much you earn is your business and
Andrew Lewinter, Lampkins’ attorney, said the discussion-of-wages
case goes right to a core purpose of the National Labor Relations
“The union is the institutional embodiment of the right
that is protected by the National Labor Relations Act,” Lewinter
said, “but the right itself is that employees can get together
and act in their mutual interest.”
In April, Jerry’s settled the charge by agreeing to remove
that clause from the employee handbook, and post a notice announcing
the change. Case closed. But lots of other nonunion employers still
maintain those rules.
“We recommend that [employers] caution employees against
discussing compensation,” says Judy Clark, president of HR
Answers, a Tualatin-based human resources consulting firm.
Clark, who has 35 years in the HR profession, thinks there’s
a shift under way. In the past, companies were more likely to outright
prohibit employees from discussing their wages with co-workers,
and even consider it grounds for discipline. Today, Clark said,
employers are more likely to say something like, “We believe
the pay information of individuals is very sensitive … so
we ask that you use significant discretion in any conversation regarding
pay.” That avoids violating federal labor law, while still
discouraging pay comparisons.
Clark said employees may not know all the reasons one co-worker
is paid more than another, and that sharing such information can
cause dissension and confusion in the workplace.
But there may be another reason to discourage employee wage comparisons:
To do so gives employers an advantage in wage negotiations.
There really is a “market” for labor. Employers buy
it. Employees sell it. The price, whether wage or salary, is subject
to negotiation. The unionized 7 percent of America’s private
sector workforce bargains collectively. The other 93 percent bargain
on their own. Often the bargaining has a “take it or leave
it” quality, like when an employer tells a worker what the
pay will be. Sometimes the price of labor is the minimum wage allowed
As theorized by classical economist Adam Smith, markets are fair
and efficient when they have many buyers and many sellers, and when
buyers and sellers are relatively equal. But real-world modern markets
are often characterized by inequalities and distortions. One such,
identified by modern economists like Joseph Stiglitz, is “information
asymmetry” — when participants in an exchange don’t
have equal information. Negotiating the price of a used car, superior
knowledge of the market or of a particular car may give a dealer
Similarly, when negotiating the price of labor, employers often
have the advantage of superior information. An employee may agree
to work for $10 an hour, not knowing that a co-worker is getting
$12 an hour for the same work. If the two employees compare pay
stubs, the lower-paid worker might use the information to argue
for a raise. Knowing co-workers’ pay can make a difference.
But American cultural norms sometimes get in the way. In a February
of 1,356 employed adults by Harris Interactive, only 33 percent
said they were comfortable sharing details of their compensation
… with their best friend. Even fewer — 15 percent —
felt comfortable discussing wages with other employees at their
“How much you earn reflects how successful you are,”
said Tim Besse, co-founder of Glassdoor.com,
the company that sponsored the survey. “It’s looked
on as inappropriate bragging to tell someone [how much you make],
and inappropriate to ask.”
Increasingly, web sites like Salary.com
are getting around this taboo, making it easier for employees to
share wage information anonymously.
Salary.com can tell you what Seattle software engineers with five
years experience earn. Glassdoor.com goes even farther, telling
you what they earn at Microsoft, Amazon, and Ebay. Current and former
employees get access to pay information by sharing their own information,
without revealing their identities.
Clark, the HR consultant, said the advent of such web sites is
making it harder for employers to prevent workers from divulging
The typical union worker can look at the union contract to know
what co-workers make. Non-union workers, on the other hand, need
all the help they can get. For workers to share wage information
is like a union in embryonic form. And it’s illegal for employers
to prevent that.