The Legality of Pay Secrecy Policies in Colorado

Many employers have policies that prohibit employees from disclosing salary information to their co-workers. These policies are problematic under both Federal and state laws. Under the National Labor Relations Act (“NLRA”), private sector employees have the right to participate in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” This has been interpreted to give employees the right to have conversations about the terms and conditions of their employment, including salary. Thus, the National Labor Relations Board, which is responsible for enforcing the NLRA, has sued private employers for firing non-supervisory employees for discussing wages with other employees.

In 2014, President Barack Obama signed an Executive Order providing that Federal contractors “will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant to another employee or applicant.” 
 
Colorado and several other states have also enacted laws to promote pay transparency by prohibiting policies against pay disclosure. In 2008, Colorado enacted the Wage Transparency Act, which provides: 

24-34-402.Discriminatory or unfair employment practices.
(1) It shall be a discriminatory or unfair employment
practice:

(i) UNLESS OTHERWISE PERMITTED BY FEDERAL
LAW, FOR AN EMPLOYER TO DISCHARGE,
DISCIPLINE, DISCRIMINATE AGAINST, COERCE,
INTIMIDATE, THREATEN, OR INTERFERE
WITH ANY EMPLOYEE OR OTHER PERSON
BECAUSE THE EMPLOYEE INQUIRED ABOUT,
DISCLOSED, COMPARED, OR OTHERWISE
DISCUSSED THE EMPLOYEE’S WAGES; TO
REQUIRE AS A CONDITION OF EMPLOYMENT
NONDISCLOSURE BY AN EMPLOYEE OF
HIS OR HER WAGES; OR TO REQUIRE AN
EMPLOYEE TO SIGN A WAIVER OR OTHER
DOCUMENT THAT PURPORTS TO DENY AN
EMPLOYEE THE RIGHT TO DISCLOSE HIS OR
HER WAGE INFORMATION. THIS PARAGRAPH
(i) SHALL NOT APPLY TO EMPLOYERS WHO
ARE EXEMPT FROM THE PROVISIONS OF THE
‘NATIONAL LABOR RELATIONS ACT,’ 29 U.S.C.
SEC. 151 ET SEQ.

While many employers think that they may prohibit employees from discussing wage or salary issues, these policies may be unlawful and any adverse employment actions arising from the enforcement of such policies may be actionable. Employers are advised to proceed with caution and consult with legal counsel before taking action against any employee for disclosing or inquiring about pay information in the workplace.

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303.813.4500 (o)
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