Equal Pay & Independence Day

July 3, 2018 |

What’s that title all about, you ask?  First, it’s a snappy rhyme.  Second, July is a perfect time to remind all employers, not just Massachusetts employers, about some of the lesser-discussed aspects of equal pay.

We’ve talked a lot on this blog about Massachusetts’ Equal Pay Act (“MEPA”), and for good reason.  The July 1st law imposes multiple compliance obligations on employers and allows employers to create an affirmative defense against equal pay complaints by conducting an audit (note:  we highly recommend that MA employers conduct an audit – do not allow the passing of the effective date to deter you!).  One aspect of MEPA we haven’t talked much about is pay secrecy.

As I mentioned, today’s post isn’t about Massachusetts employers.  It’s about all employers.  Many states have state-specific pay secrecy laws, including: California, Colorado, Connecticut, Illinois, Maryland, Maine, New York, Vermont, and DC.  And, a federal law, the National Labor Relations Act (“NLRA”), also prohibits pay secrecy.  The NLRA states that employees have the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.  Concerted activities under section 7 includes discussion of wages and conditions of employment.  And, employers may not enact policies or procedures that prohibit employee’s discussions of wages or (even if they do not outright prohibit) serve to chill such discussions.  Further, an executive order issued under President Obama prohibits federal contractors and subcontractors from, under certain circumstances, taking adverse employment actions against applicants and employees for asking about, discussing, or sharing information about their pay or the pay of their co–workers.

There are, however, exceptions to the NLRA’s rule:

  • Section 7 does not apply to supervisors.  The term “supervisor” means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
  • Confidential employees are also excluded from protection.  A confidential employee is defined as someone who assists and acts in a confidential capacity to the management personnel who make and implement labor relations policies, or as someone who has regular access to confidential information about future bargaining strategy or changes that the employer anticipates may result from collective bargaining.  The definition is not so broad as to include all employees with access to confidential information.
  • Unauthorized/wrongfully obtained information – Wrongfully obtaining information from a company’s private files is not a protected activity.  While section 7 guarantees an employee the right to use information available in the normal course of work activity and association, it does not extend to the unauthorized dissemination of information obtained from an employer’s confidential files or records.  Cases here involve employees accessing files or offices they do not have a right to or listening in or private management conversations.
  • Confidential information/breach of trust – Certain types of information may involve such disloyalty to an employer that the disclosure falls outside the protection of Section 7. One area considered is whether the information that was disclosed was of a type which the employer had a right to expect would be treated as confidential, such that the disclosure was fundamentally a breach of trust.  Cases here involve employees properly obtaining information through their roles.  However, because the employees knew that the information was confidential, and were aware that the employer prohibited dissemination of the information, the disclosure fell outside of section 7 protection.

What practical steps can you take to ensure compliance with state and federal laws?

  1. Review your policies/handbook:  Make sure policies don’t explicitly or implicitly prohibit employee behavior protected  by state or federal law.
  2. Consider your compensation practices:  Many employers bristle at the idea of making compensation practices public.  And, the law doesn’t require that an employer make public its pay bands, steps, or compensation strategy.  But, transparency can cut down on gossip and misinformation.
  3. Consider your culture:  The company’s culture, and the words and actions of the company’s leaders, influence an employee’s decision about who to approach with questions or concerns about working conditions, including pay.  Consider whether your employees are likely to feel welcomed and empowered to approach leadership.
  4. Train front-line supervisors and managers:  These managers are the most likely to overhear conversations about pay and to innocently and unknowingly violate the law by discouraging, or even disciplining, employees from engaging in such discussions.  Ensure your supervisors and managers are aware of the federal and state laws that protect the employee’s right to talk about pay.

Enjoy your Independence Day!

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