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Is Firing an Employee for Disclosing Their Pay Increase Illegal?

Most likely; yes, it is illegal to fire an employee for disclosing their pay. Employees gossip; spread rumors and tell stories. With that in mind, employers are inclined to suggest that workers should not discuss their wages, evaluations, or raises with other coworkers. However, according to the National Labor Relations Act (NLRA), it’s prohibited for employers to take action against any employee who does. The discussion of wages and raises among employees is considered a “protected concerted activity,” specifically if it deals with workplace safety, benefits, or wages. These rights protect both union and non-union employees working in the private sector. Yet certain employees are exempt from this protection such as public employees, agricultural and domestic workers, and supervisors.

For the National Labors Relations Board (NLRB) to take action against an employer, the board must determine if the activity (1) was concerted, (2) benefits other employees, and (3) if the action was carried out in a harmful or irresponsible manner.

Bottom line – if you were to fire an employee for discussing wages, and it was found out later that the discussion is protected under the NLRA, you could be obligated to rehire the employee and even provide back pay for time lost.

Can Employees be Fired if they Share Workplace Grievances on Social Media?

It all depends on the grievance. Let’s consider the May Day strike organized by grocery workers at Amazon and Whole Foods, and by temp workers for Instacart and Shipt. The strikers called ‘essential workers’ during the Novel Corona Virus pandemic demanded hazard pay, more PPE (personal protective equipment) and professional cleaning services from their employers. Amazon workers in dozens of warehouses had tested positive for COVID-19 according to the Washington Post and those workers asked the public to boycott their employers. .

To be clear, NLRA protections do extend to social media activity. Disciplining a worker for posting or tweeting about workers being unprotected, overworked, or denied breaks can violate the law. However, the NRLA does not afford protection for employees who violate other company policies using social media. If an employee threatens another employee or supervisor in social media posts or tweets, and that action violates company policy based on workplace violence then an employer has the right to place that employee under disciplinary action.

As with any disciplinary action, employers should ensure that an investigation is done into any allegations before any reprimand or consequences occur.

My Small Business is in Texas, What are my Options?

Let’s say you have a confidentiality policy about employees discussing wages like the one below:

Employees are prohibited from either discussing with other employees or posting through social media information about their salary, company benefits, or increases. This information is strictly confidential and should not be a topic of discussion in the workplace. Violation of this policy will be considered a breach of confidentiality and may be subject to disciplinary action, and possible ground for termination.

Were you aware that policies, like the one above, and disciplinary actions that occur because of a policy that prohibits conversations regarding salary and wage increases are against federal law?

In spite of the NLRB’s unwavering position regarding benefits and salary discussions, there may still be some wiggle room for employers. Under the NRLA, employees have the right to discuss wages or benefits; however, it does not require employers to allow these discussions to occur during working hours. But it’s a fine line because by banning these discussions while allowing other types of conversations at work might be perceived as an intent to interfere with employees’ rights under Section 7.

Under the law, the content of the discussion matters. This is especially true with regard to privacy issues under laws like HIPAA or ADA. For instance, two employees are discussing health benefits as it relates to an uninvolved third employee’s health condition. If the discussion reveals information that should be confidential under HIPAA or ADA than the two employees could lose their protections under the NRLA. Under those circumstances, the NRLB would investigate to ensure that employees were aware that revealing confidential health information violates policy and the law. Secondly, the NLRB would look to see if the business actually kept such information confidential and by what means.

Lastly, under the law, how the wage and benefits information was obtained by an employee is a crucial consideration. Let’s take the scenario above where two employees are discussing either the third employee’s health condition or salary without them being part of the discussion. If the health or wage information was obtained through an ordinary conversation with others or from the third employee directly, then all three employees are protected under the NLRA. However, if the wage, salary increase, bonus or health information was obtained by breaking into an area of the company that is prohibited or if the conversation leads another employee to access information in spite of restriction policies, whether through passwords or hardcopy files, then those employees would not be protected.

Give Employees Alternatives to Salary and Benefits
Small businesses can provide alternatives other than policies that suggest benefits and salary conversations are strictly off-limits and can result in termination.

  1. Be sure to advise employees that conversation and time spent talking about everyday situations and family is fine during work hours, but mention it in a general way, and do not specifically mention salary or wage increase topics. Also, be mindful of your tone, you don’t want to sound threatening when discussing how much time employees can devote to conversations during work hours, yet be purposeful in reminding employees that they are there to do a job. You also want to avoid implying that employees will be in trouble if they talk too much about their job conditions that they may face reprimands or may even be shunned by their co-workers because of it. This can be perceived as a potential violation under Section 7.

  2. Promote what’s best about your company and make employees aware of their benefits. In doing so, be sure to mention that your benefit plans and pay scale are competitive in your industry. Discuss policies and practices about merit increases, bonuses, advancement, and tuition reimbursement if it applies. Letting employees know what’s available to them makes them feel like contributors and that they have a share in the company’s success. Transparency about what your business can offer them will make them less likely to discuss their salary with their co-workers or others.

Every now and then revisiting your discussion policies about salary, bonuses, and benefits is a good idea. But avoid writing your own from a software template or using a ‘sample’ policy found on the Web. Since this area of law is extremely complex and abundant with potential risks, it’s always best to consult an employment law professional before taking any action on your own. Reach out to Natalie Lynch today to start a conversation to keep your workplace safe from this risky compliance area.