Gag rules: illegal, but alive and well

President Roosevelt signed the NLRA in 1935.

The National Labor Relations Act of 1935 (NLRA) "guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike if necessary."

Despite the NLRA, some companies still threaten their employees with lowering their pay or hours and even with termination if they discuss their pay with other employees.

"Gag rules are illegal," says Nancy Koehn of the Harvard Business School. "But there is no question that they are alive and well in America."

There are many disadvantages for workers who don’t know if they’re getting paid fairly or not, says Koehn.

"If you have no sense of what your pay is on some kid of latter of compensation across the organization, you have no sense of what kind of organization this is in terms of how they reward people for a job well done," says Koehn.

Listen to the full conversation in the audio player above.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.

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