Employment Law Blog

News, trends and analysis in employment law and HR

Sep 20, 2019

Q&A: Directly sharing wages with other companies is illegal

Wage and Hour 

salary-payroll

Question: Our plant manager asked the managers of the other operations in our business park to share what they’re paying for forklift operators and what they’re planning for wage increases this year. He’d like to make sure that we remain competitive; is his informal survey of these local companies okay?
 
Answer: Absolutely not! Antitrust laws prohibit employers from directly discussing wages or sharing any future compensation plans with each other. Wage surveys are acceptable only when historic data is submitted to a third party and anonymized. A recent class action complaint against 18 poultry processing companies, plus many of their subsidiaries and affiliates, alleges that the companies shared wage data in order to keep workers’ wages low. The companies are accused of holding executive-level in-person meetings to discuss wages; participating in detailed monthly wage surveys; and allowing managers to contact their peers at other companies to share wage information, including plans for future wage changes. The case has a long road ahead before a jury gets to decide whether there were violations and if so how much money the employees should collect in damages, but either way, the companies’ costs to defend the case will be astronomical (Jien v. Perdue Farms, Inc., D Md, complaint filed Aug. 2019).
 
Antitrust violations can result in criminal prosecutions, civil liability, and triple damage awards. For guidance, check out the U.S. Department of Justice’s antitrust guidance for HR professionals. If you need comparative wage information, you have legitimate options for obtaining the information you need. Vigilant conducts a confidential blind wage survey each year, with invitations going out in January. The survey results are free to participating companies and available for $300 to non-participating Vigilant member companies. We can also help you with conducting antitrust-compliant “mini wage surveys” if you have a particular need. Contact your Vigilant employment attorney for assistance. And finally, check out the Vigilant member website’s Compensation Data web page, which contains links to government wage data.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.

Comments