Employment Law Checklist Project: Thou Shall Not Prohibit Employees From Talking About Their Salary

At our Shipman & Goodwin Labor & Employment Law seminar last week, one of the hot topics that got attendees talking was about minimum wage & overtime rules — both of which are in the midst of change.

But my fellow partners brought up another law in that discussion that shouldn’t be overlooked.  And that provides a nice entry way into this week’s Employment Law Checklist Project #emplawchecklist.

The law is set forth at Conn. Gen. Stat. Sec. 31-40z. The key prohibitions are set forth in subsection (b) as follows:

No employer shall:

(1) Prohibit an employee from disclosing or discussing the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

(2) Prohibit an employee from inquiring about the wages of another employee of such employer;

(3) Require an employee to sign a waiver or other document that denies the employee his or her right to disclose or discuss the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

(4) Require an employee to sign a waiver or other document that denies the employee his or her right to inquire about the wages of another employee of such employer;

(5) Inquire or direct a third party to inquire about a prospective employee’s wage and salary history unless a prospective employee has voluntarily disclosed such information, except that this subdivision shall not apply to any actions taken by an employer, employment agency or employee or agent thereof pursuant to any federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes. Nothing in this section shall prohibit an employer from inquiring about other elements of a prospective employee’s compensation structure, as long as such employer does not inquire about the value of the elements of such compensation structure;

(6) Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses or discusses the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee; or

(7) Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who inquires about the wages of another employee of such employer.

That’s a lot of “don’ts” in one law. So let’s dig deeper into each of them to add to our checklist.

Scope:  Employers are defined here as “any individual, corporation, limited liability company, firm, partnership, voluntary association, joint stock association, the state and any political subdivision thereof and any public corporation within the state using the services of one or more employees for pay”.  In other words, among the broadest definitions of employers. And it includes the state.

What’s Prohibited or Required? A lot.  The law says that employers can’t prohibit employees from disclosing their own salary or asking co-workers about theirs.  Employers can’t require employees to waive their rights to do those things.  And employers can’t take an adverse employment action against employees who do those things.  It also prohibits employers from asking job applicants about the applicants wage & salary history (unless it’s voluntarily disclosed by the applicant or an exception applies.)

Private Right of Action or Other Penalty Allowed? Yes! An employee has two years to bring a private right of action.

What May Be Recovered? Employees may recover compensatory damages, attorney’s fees and costs, punitive damages and “such legal and equitable relief as the court deems just and proper.”  In other words,  potentially a lot.

Any Practical Steps Employers Can Take? Yes.  Update your employee handbook to address this law. Tell supervisors and hiring managers about these restrictions.  And if you see employees discussing their salary on social media, resist the urge to fire the employee — you may just get a lawsuit as a result.

Any Other Interesting Information or Background? This law is really the result of two different bills that I’ve talked about many times before when they were under consideration.  But seeing them in the statutes shows their breadth and scope. And don’t forget about the NLRA restrictions on “protected concerted activity.”

And really, so “Everybody’s Talkin'”? Take a breath and listen to this great song by Tedeschi Trucks Band.

This is one of those laws that has sneaky exposure for businesses. Creating a private right of action — with attorneys fees and punitive damages — means that at some point, attorneys representing individuals are going to find some cases to make an example of.  Don’t be that employer.

Train your staff on this law and ensure your compliance with it.

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