What happens when Googlers share their salaries

In 2010, Dan Auerbach sent out an e-mail blast to his co-workers at Google, encouraging them to disclose their title and salary information on a website he’d created. Auerbach, an engineer, wanted a way for employees to share their salaries with one another internally — a way, he hoped, to ensure everyone was getting paid what they deserved. But within an hour of the email going out, Google had cut off access to the site on the corporate network.

Google says it had security concerns about the site because it didn’t use SSL encryption, an increasingly standard protocol signified by a web address starting with “https.” But Auerbach is the second former Googler this month to say that the company reacted negatively to employee efforts to share information about compensation internally.

Two weeks ago, former Google engineer Erica Baker made waves after she revealed on Twitter that a spreadsheet she created to share salary data went viral internally and highlighted “not great things” about the parity of pay. By the time Baker left the company in March, five percent of Google’s 50,000 or so employees had shared their salaries, and because of it, “people asked for and got equitable pay,” she tweeted. But Baker also said her manager and “higher-up people weren’t happy about it.” She claimed that management refused to give her “peer bonuses” that colleagues wanted to send her for creating the spreadsheet. Google wouldn’t comment initially, but told Fusion days later that while the company couldn’t comment specifically on that episode, its “employees are welcome to share information about salary if they choose.”  Despite Google’s unhappiness with it, Baker’s spreadsheet is still alive.

Auerbach’s experience years earlier than Baker suggests that Google is not as comfortable with salary-sharing as the company suggests. Google says an employee has never been terminated for salary sharing, but legal experts say simply discouraging employees’ attempts to create salary transparency can get an employer in trouble under labor laws.

“An employer is not allowed to interfere with or restrain employees from engaging in ‘mutual aid or protection,’” said Jahan Sagafi, an employment rights attorney and partner in the San Francisco office of Outten & Golden. “Any kind of interference or restraint can violate the National Labor Relations Act. If Google wants to restrict people’s access to information, it has to walk a fine line.”

The National Labor Relations Act is the federal law that allows employees to unionize, but it also provides broader protections for “concerted activities” that benefit or protect employees. If employees want to share salary information to ensure they’re being paid fairly, it’s a legally protected right. A section of the California Labor Code also prohibits wage secrecy policies.

Several attorneys interviewed by Fusion said that if any employer discourages the sharing of salary data in any way — even simply by expressing displeasure — it could be in violation of those laws.

“Employers cannot prohibit the sharing of salary information,” said Kay Lucas, a San Francisco employment attorney. “There is no reason not to be transparent, other than if you’re paying some people well and other people differently.”

Auerbach says he launched his website after months of frustrating negotiations with the company’s HR department about creating some kind of officially sanctioned, internal tool for sharing compensation. Google counters that it was helpful to Auerbach, and says it offered him pointers on how he might create such a tool. Auerbach says he got the runaround.

“I thought it would good for people to have some way of sharing their salary information,” he said. “There were sites like Glassdoor, but the problem was it wasn’t nearly specific enough to be useful. For employees it’s very difficult to know what salary they should be getting.”

Eventually, Auerbach gave up on going through official channels. He already had plans to leave the company and go back to school, so going rogue didn’t seem too risky. He built the title-and-salary-sharing website and sent out an e-mail blast letting colleagues know it was up. Though it was immediately “blackholed” by Google, making it inaccessible on internal networks, it garnered hundreds of entries within a few hours. However, after backlash from both management and co-workers (over both the security, and, he presumes, the idea), he took it down the same day.

Google told Fusion that while “employees are free to share their salaries with one another if they choose,” in this case the website “lacked adequate security controls, like encryption, and raised concerns that confidential personally identifiable information of employees could be compromised.”

Auerbach, who is now a security engineer, acknowledged that the website was not as secure as it could have been. The only information on the site was salaries and titles of people who had voluntarily entered their own data, but theoretically a hacker might be able to pull other data from an entry, such as the the IP address of the device that data came from.

“There were some legitimate concerns,” said Auerbach, “But I strongly suspect they weren’t enough to justify blackholing the site.”

The theory behind transparent salary policies is that they level the pay playing-field, making it hard to have policies that favor paying one demographic, say men, more than another group, like women, by instead putting it all out in the open.

“Transparency is the enemy of private deal making and negotiations,” said Freada Kapor Klein, a partner at Kapor Capital and Founder of the Level Playing Field Institute. “When bargaining and secrecy prevail, groups that have less experience negotiating or who are judged more harshly for asserting their worth suffer.”

But, as Stanford Law Professor Alison Morantz pointed out, often existing regulations like the NLRA don’t have enough teeth. Google, for example, could argue that it has a “legitimate and substantial business justification” for limiting access to a website, like interference with employee productivity. Or in this case, security concerns.

The options employees have for enforcing their rights can seem daunting. To report a violation of federal law, an employee would need to file a complaint with the National Labor Relations Board within six months of the incident. If the labor board decides to pursue an investigation, its first choice is to reach a settlement. Otherwise, it moves onto a hearing, after which the NLRB can force a company to do things like pay an employee backpay or post a notice promising not to violate a law, but the agency cannot fine them. The labor board receives more than 20,000 complaints each year.

“That’s not a particularly strong deterrent,” she said. “It’s really difficult to vindicate employee rights.”

What’s happening at Google isn’t rare. In 2010, nearly half of all workers in the U.S. reported that they were either forbidden or strongly discouraged from discussing their pay with their co-workers, according to a survey by the Institute for Women’s Policy Research.

The NLRA doesn’t address every situation in which an employer might try to prevent employees from talking about their pay with their colleagues and only a handful of states, such as California, have specific laws on the books to protect pay transparency. In an effort to issue a federal endorsement of pay transparency, Obama signed an executive order last year specifically prohibiting federal contractors from retaliating against employees who discuss their compensation.

Auerbach’s experience inspired him to start working on a website called FairPay with a few friends that will allow tech employees to share their compensation with one another. The site, which is slated to launch in the next few weeks, will only be accessible to employees of a few major tech firms, who in turn will only be able to access salary data for the company they work for. Eventually, though, Auerbach imagines it growing to serve industries outside of tech.

“There’s a narrative here that the companies are winning, that salaries are a private thing and you shouldn’t feel comfortable sharing that info,” he said. “That narrative benefits corporations, but not employees. It just allows a lot of unfairness to continue.”