As you have likely heard, The Paycheck Fairness Act (S. 797) failed to pass the Senate this week. That law would have included increases in the types of remedies available to victims of gender-based pay discrimination under the Equal Pay Act (“EPA”) to include compensatory and punitive damages and would have made class actions much easier. While the Paycheck Fairness Act may be re-introduced in the future, the provision in the Act that would have prohibited employers from punishing employees for sharing salary information including bonuses with their coworkers is not dead.
The Paycheck Fairness Act provision would only have bolstered similar protections existing under the federal National Labor Relations Act (“NLRA”) and certain state laws which bar employers from disciplining employees for discussing pay and benefits. More specifically, Section 7 (29 U.S.C. § 157) of the NLRA states that employees have the right to “engage in concerted activities”, including the right to discuss their terms and conditions of employment with each other. And Section 8(a)(1) of the NLRA (29 U.S.C. § 158(a)(1)) makes it an unfair labor practice for an employer to deny or limit the Section 7 rights of employees. These NLRA provisions apply equally to union and non-union employees.
The State of California is even more explicit about this issue, California Labor Code sections 232 and 232.5 preclude employers from disciplining or discriminating against employees who discuss their pay or working conditions. The statutes also prohibit employers from making it a condition of employment or asking an employee to sign a document that he/she will not discuss pay or working conditions. Note that these provisions do not mean that employers may not bar employees from discussing trade secret, proprietary or other confidential information by policy or agreement. They do mean, however, that employers need to consider the source of any discussion of wages – if the source is an employee discussing his/her pay or a co-worker’s because that co-worker voluntarily shared the information, the employees are protected. On the other hand, if an employee discloses pay information of other employees by improperly accessing or misusing access to private files, employers are in a position to investigate and take action as appropriate. Employers should review any policies related to discussion of pay, benefits and/or work conditions to ensure compliance with the NLRA and state law.
