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8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 1/9

Last fall, I became a barista in a small, “socially responsible” coffee company. A

few months later, I got a temporary paralegal position at one of the world’s biggest

multinational, corporate law firms.

The two companies had little in common, but both told me one thing: Don't talk to

your coworkers about your pay.

When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid'

Whether I was working as a barista or a paralegal, the story was the same: My employers wanted me to keep my mouth shut about money.

JONATHAN TIMM

JUL 15, 2014 | BUSINESS

SFerdon/Shutterstock

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 2/9

At the law firm, this warning was conveyed to me during my salary negotiation.

After I had worked for three months through a temp agency, the firm offered me a

spot on their payroll. Given the size and success of the firm, the starting salary

seemed low.

The HR manager tried to convince me that the offer was competitive. She told me

that she couldn’t offer more because it would be unfair to other paralegals. She said

that if we did not agree to a salary that day, then she would have to suspend me

because I would be working past the allowed temp phase. I insisted that she look

into a higher offer and she agreed that we could meet again later. Before I left, she

had something to add.

“Make sure you don’t talk about your salary with anyone,” she said sweetly, as if

she was giving advice to her own son. “It causes conflict and people can be let go for

doing it.” (This is to the best of my recollection, not verbatim.)

It wasn’t all that surprising to hear this from a corporate HR manager. What was

surprising was the déjà vu.

Just three months earlier, some of my coworkers at the coffee shop told me that our

bosses, who worked in the office on salaries, and even the owner, got a higher cut of

the tips than we did. One barista told me that when she complained about it, the

managers reduced her hours.

When you make minimum wage and have to fight for more than 30 hours per week,

tips are pretty important, so I sat down with my managers to discuss the

controversy. That’s when they told me not to talk about it with the other baristas.

The owner “hates it when people talk about money,” my manager added, and

“would fire people for it if he could.” I sulked back to the espresso machine, making

my lattes at half speed and failing to do side work.

In both workplaces, my bosses were breaking the law.

Under the National Labor Relations Act of 1935 (NLRA), all workers have the right

to engage “concerted activity for mutual aid or protection” and “organize a union to

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 3/9

negotiate with [their] employer concerning [their] wages, hours, and other terms

and conditions of employment.” In six states, including my home state of Illinois,

the law even more explicitly protects the rights of workers to discuss their pay.

This is true whether the employers make their threats verbally or on paper and

whether the consequences are firing or merely some sort of cold shoulder from

management. My managers at the coffee shop seemed to understand that they

weren't allowed to fire me solely for talking about pay, but they may not have

known that it is also illegal to discourage employees from discussing their pay with

each other. As NYU law professor Cynthia Estlund explained to NPR, the law

"means that you and your co-workers get to talk together about things that matter

to you at work." Even "a nudge from the boss saying 'we don't do that around here'

... is also unlawful under the National Labor Relations Act," Estlund added.

And yet, gag rules thrive in workplaces across the country. In a report updated this

year, the Institute for Women’s Policy Research found that about half of American

employees in all sectors are either explicitly prohibited or strongly discouraged

from discussing pay with their coworkers. In the private sector, the number is

higher, at 61 percent.

This is why President Obama recently signed two executive actions addressing

workplace transparency and accountability. One prohibits federal contractors from

retaliating against employees who discuss their pay with one another. The other

requires contractors to provide compensation data on their employees, including

race and sex. But while these actions protect workers at federally contracted

employers, they do not affect others.

The bill that would cover the rest of workers is the Paycheck Fairness Act. The law

would both strengthen penalties to employers who retaliate against workers for

discussing pay and require employers to provide a justification for wage

differentials.

These reforms are necessary to address this widespread, illegal problem that the

law has failed to address for decades. Gag rules violate a fundamental labor right

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 4/9

and allow for discriminatory pay schemes.

“The problem isn’t so much that the remedies are inadequate,” Becker says, “but that so few workers know their rights.”

Given their illegality, why are gag rules so common? One answer is that the NLRA

is toothless and employers know it. When employees file complaints, the National

Labor Relations Board’s “remedies” are slaps on the wrist: reinstatement for

wrongful termination, back-pay, and/or “informational remedies” such as “the

posting of a notice by the employer promising to not violate the law.”

At the same time, ignorance of the law can just as easily fuel gag rules. Craig

Becker, general counsel for the AFL-CIO, used to serve on the National Labor

Relations Board. He told me that workers who called the NLRB rarely were aware

that their employer’s pay secrecy policy was unlawful.

“The problem isn’t so much that the remedies are inadequate,” Becker said, “but

that so few workers know their rights.” He says that even among those workers who

are aware of the NLRA, many think that it protects unions but no one else. Now

overseeing organizers at the AFL-CIO, Becker has found that before organizers

even begin helping workers, they have to educate employees on this very basic law.

“Workers call us up saying they’re unhappy and they want to organize,” Becker

explains, “and when organizers look at the employee manual, sure enough, they

find a policy saying that workers aren’t allowed to discuss their pay.”

Gag rules, then, are policies that flourish when employers know the law and their

employees do not.

But why do employers do this in the first place? Many employers say that if workers

talk to each other about pay, then tension is sure to follow. It’s understandable: If

you found out that your coworker made more than you for doing the same work,

then you’d probably be upset.

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 5/9

A study by economists David Card, Enrico Moretti, and Emmanuel Saez from

Berkeley and Alexandre Mas from Princeton supports that prediction. To study the

relationship between pay transparency, turnover, and workplace satisfaction, they

selected a group of employees in the University of California system and showed

them a website that lists the salaries of all UC employees. They found that

employees who were paid above the median were unaffected by using the website,

while those who were paid lower than the median became less satisfied with their

work and more likely to start job hunting. This result suggests, according to the

authors, that employers have an incentive to keep pay under wraps.

The limitation of this research is that it doesn’t tell us much about whether those

employees’ dissatisfaction was a bad thing. While it’s possible that those employees

were getting a fair wage and just felt belittled by their comparative pay, it’s also

possible that they were getting stiffed.

Do gag rules directly cause wage discrimination? That's unknown, but they undoubtedly open the door to it.

And many workers are, in fact, getting stiffed—especially women and people of

color. Recall the story of Lilly Ledbetter, the inspiration of the Lilly Ledbetter Act,

which gives workers a longer period of time to file pay discrimination suits against

their employer. Ledbetter was told that she would be fired if she talked about pay

with her coworkers, but after nearly three decades of work with Goodyear,

someone slipped her a note saying that she was underpaid.

Ledbetter’s case shows how pay secrecy can cause the pay gap between men and

women, a gap that widens between men and women of color. More than 50 years

after the Equal Pay Act, study after study show that women are still paid less than

men for the same work. Some have argued that the pay gap is effectively a myth,

attributing it to women’s career choices rather than workplace discrimination. If

only that were true. As the National Women’s Law Center has repeatedly pointed

out, this “ignores the fact that ‘women’s’ jobs often pay less precisely because

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 6/9

women do them, because women’s work is devalued, and that women are paid less

even when they work in the same occupations as men.” Even when you look at

industries dominated by one sex or the other, the pay gap exists in both.

Ariane Hegewisch is the study director at the Institute for Women’s Policy Research

and the author of several reports on pay secrecy and wage discrimination. One of

the reasons she sees behind the pay gap is that, five decades after the Civil Rights

Act outlawed discrimination on the basis of sex, old-fashioned workplace beliefs

still justify sexist pay distribution. For example, in one case, in which a group of

women sued Walmart for sexist discrimination in pay and promotions, women

testified that their managers said men “are working as the heads of their

households, while women are just working for the sake of working,” even though

women are now the sole or primary breadwinners in around 40 percent of

American households.

Others have explained the pay gap by showing that women are less likely to ask for

raises. True as this is, the solution isn’t as simple as telling women to speak up.

Several experiments by Hannah Bowles of Harvard and Linda Babcock and Lei Lai

of Carnegie Mellon University have shown that employers are more likely to

penalize women than men for negotiating. This suggests that women bite their

tongues to avoid being called “pushy” or “bossy,” words with particularly negative

connotations for women.

We don’t know whether gag rules directly cause wage discrimination, but they

undoubtedly open the door to it. Employers who keep pay secret are free to set pay

scales on arbitrary bases or fail to give well-deserved raises because of social

norms. "When you don't have transparency and accountability,” Hegewisch told

me, “employers react to these pressures and biases and women tend to lose out."

Of course, one of the time-tested mechanisms of preventing wage discrimination,

unionization, has been in steady decline for decades. Jake Rosenfeld, associate

professor of sociology at the University of Washington, has studied unions and is

now researching the relationship between pay secrecy and wage discrimination. He

told me that although there is not enough data to draw a direct causal line between

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 7/9

pay secrecy and unfair wages, we do know that in the public sector, where wage

transparency is far more common, pay tends to be more equal and benefits are

more evenly distributed.

But in both the public and the private sector, union decline has shifted the balance

of power toward employers in a way that can allow employers to keep wages secret

and pay their workers unfairly. “Removing a key source of collective power in the

vast majority of workplaces opens up space for employers to institute new wage

setting practices, and pay secrecy is one of them,” Rosenfeld says. “It’s much

harder to keep the books closed when you have a union arguing left and right to

open them up.”

Republican lawmakers have blocked the Paycheck Fairness Act three times,

claiming that it would just increase lawsuits against employers. They’ve also argued

that forcing firms to share their compensation practices would hurt business. But

according to Hegewisch, there’s no evidence that lawsuits have increased in states

where pay transparency laws have been strengthened, and firms already share

compensation information through human resources services like WorldatWork.

If the law did change, we would still face one of the biggest barriers to pay

transparency: workplace culture. Even the most confident among us can melt into

awkward, self-conscious messes when we have to negotiate our salaries, and asking

a coworker about pay seems akin to asking about their sex life. Private companies

are showing that opening up the books completely can work, while the public sector

has done that for decades, yet many still fear that talking about pay would destroy

our workplace collegiality.

On the day my bosses at the coffee shop told me not to talk tips, my morale hit

bottom. An organization I once trusted was telling me not to ask basic questions

about my compensation. Even if pay secrecy comes with good intentions, this is its

unintended effect: It tells workers that their bosses have something to hide, or that

they don’t have the right to get a second opinion on whether they are being treated

fairly. As Craig Becker told me, “Workers can only improve their situation when

8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 8/9

they can understand their working conditions.” Deciding whether a pay scale is fair

cannot be left up to the employer alone.

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ABOUT THE AUTHOR

JONATHAN TIMM is a writer based in Brooklyn.

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8/27/2017 When the Boss Says, 'Don't Tell Your Coworkers How Much You Get Paid' - The Atlantic

https://www.theatlantic.com/business/archive/2014/07/when-the-boss-says-dont-tell-your-coworkers-how-much-you-get-paid/374467/ 9/9