Ask the Experts: Salary Nondisclosure Agreements

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Question: We’d like to have employees sign a documented policy saying that they will not discuss their pay with current or past employees or with others outside of our company at the risk of having their employment terminated. Is this allowed?

Answer: The short answer is no.

Section 7 of the federal National Labor Relations Act (NLRA), which is enforced by the National Labor Relations Board (NLRB), specifically provides that employees, even those not protected by unions, cannot be prohibited from discussing their compensation and other working conditions. These discussions are called protected concerted activity.

Under the NLRA, employers cannot interfere with, restrain, or coerce employees in exercising these rights. Therefore, employers are prohibited from creating policies or rules that prevent or limit employees’ rights to speak about their wages, benefits, and working conditions.

As HR professionals, we know that employees are likely to discuss wages and other workplace issues. To avoid claims of unequal or unfair pay, it’s a best practice to ensure that your employees are paid in a fair and equitable manner. Make sure that there is an objective business reason for any pay discrepancies and that you can articulate this reason to any employee who may inquire about it.

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