Question: Two of our employees accessed confidential payroll files and now are loudly complaining they are the lowest-paid employees in the company. Their manager is upset and wants to fire them for breach of trust, disrupting our business operations, and hurting morale. The whole department is demanding a raise. What can we do here?
Answer: Proceed with caution and avoid jumping to conclusions. Section 7 of the National Labor Relations Act (NLRA) protects most nonmanagement employees’ right to engage in “protected concerted activity” which means they can join together and discuss their wages, hours, and working conditions, regardless of union representation. HR should conduct an impartial investigation and find out what actually happened. Then, apply your policies and standards of conduct to the facts and determine if a policy violation occurred. Regardless of how the employees obtained the payroll information, they engaged in a protected activity by using it to argue for higher wages. Before taking adverse action against an employee, always consider whether the alleged misconduct is connected to, or part of, a protected activity. Employees cannot be retaliated against or punished for engaging in a protected activity. Here, your company would have to prove that it had legitimate grounds to terminate the employees even if they hadn’t shared wage data and rallied coworkers to ask for raises. In other words, you must be able to show that the protected activity had nothing to do with the employment decision.
Recently, the National Labor Relations Board determined that an employer violated the NLRA by discharging two employees who discussed their wages and requested salary increases after accidentally coming across payroll data that was filed in the wrong place, showing they earned less than everyone else. The employees had been assigned to review the contents of client files and discovered payroll information mistakenly stored among the documents. In the termination meeting, the company told the employees they were being fired for “breach of trust” in accessing confidential information. However, the company couldn’t identify a specific policy or standard that was violated. The company then relied on its prohibition against disclosure of confidential information to third parties, but the employees only disclosed the information internally. The Board found the company’s shifting reasons for termination “indicative of unlawful pretext.” Ultimately, the company couldn’t prove that the employees’ conduct was improper and that it would have terminated them even in the absence of their protected activity (demanding higher wages). Therefore, the protected activity was an unlawful “motivating factor” in the termination decision. The Board pointed out that an employer cannot interfere with an employee’s exercise of their rights under the NLRA, warning that disciplining an employee for conduct that constitutes a protected activity violates the NLRA regardless of motive (Vesta, VFO, LLC, NLRB, Jan. 2024). For more information on NLRA Section 7 rights, see our Legal Guide, Retaliation Claims: How to Avoid Them or contact your Vigilant Law Group employment attorney for specific advice.