In US is it common for to keep offer letter/employment contract confidential?

Question

I'm not from the US and not familiar with its labor laws. I applied with a company as a software developer that would work on 4-5 month contracts with its clients. There were some red flags, like how they wanted me to lie on my resume, so in the final interview I asked for ridiculously high pay to disqualify myself. They gave me a job offer with that pay.

I'm very unsure what I'm going to do next. They told me I would sign the paper work on the first day of training, and I asked for a copy of it to review and they gave it to me. In the job offer and employee contracts it states

Please note that the details of your compensation are to remain strictly confidential.

and

Employee represents and agrees that he has received a copy of this Agreement to keep for his own records. Employee further agrees to maintain the confidentiality of and not disclose the terms and conditions contained in this Agreement, except as otherwise provided herein.

I can't find it now but I thought I read on this site that it's actually illegal for an employer to tell you not to disclose how much you make. Anyway, I asked on law.se if this is legal to have in a contract, but my question here is, is this common in the US?

Do employers expect you to not sign paper work prior to starting a new job? Do they try to keep your employment contract as confidential as possible? Why is this?

Answer 1

From my experience, this is a common line to have in an offer letter in the US. There's been many great discussions here on Workplace SE arguing if employees should or should not discuss compensation, however, in the US, there are laws that protect such activity.

(Disclosure: I am not a lawyer, you may want to consult one before making any decisions) In the US, the National Labor Relations Board actively protects employee's rights, including anti-unionization activity by employers. The basis of their work and the protections offered is through the National Labor Relations Act. Over the years, the NLRB has determined that employees discussing compensation packages constitutes as protected activity, regardless of the presence of a union, so long as it is with other current employees and on their own time.

In reality, your employer could terminate your employment for breaching this part of the contract even if it's later found to be unenforceable. While you would have a good chance at winning a case in court, it's a long process and may not be worth the trouble.

Answer 2

I assume here you are working for some kind of employment agency.

Requiring you to keep secret your pay is standard. The reason is that if you tell the "client" what you are paid, then the "client" might try to hire you away or even get a different agency to hire you instead. Another serious potential problem is that your pay could be revealed to OTHER workers from the same agency working at the same client.

For example, let's say the agency has 3 workers at the client. They are paying 2 of them $35 an hour and they are paying you $55 an hour and all three of you are doing exactly the same thing. Now, suppose you go and tell the other 2 programmers that the agency is paying you $55 an hour. What do you think will happen? The need for a confidentiality agreement should be obvious from this example.

Answer 3

Please note that the details of your compensation are to remain strictly confidential.

This is standard practice for several reasons. First it is so that you retain compensation amounts against other employees so that there is no friction or struggle on the topic of pay vs rank, getting paid differently than an employee than another employee of the same stature, or any other HR nightmarish situation.

Employee represents and agrees that he has received a copy of this Agreement to keep for his own records. Employee further agrees to maintain the confidentiality of and not disclose the terms and conditions contained in this Agreement, except as otherwise provided herein.

I'm no lawyer, but this just seems like legal garble to prevent the employer from any nonsense that may happen from leaked compensation. If there is a difference in contractor rates, there may be a reputation of playing favorites or unfair treatment.

AFAIK, I don't think it's ILLEGAL to disclose how much you are making if you are an employee, but it may be within an employer's right to discharge or let you go for reasons up to their discretion. Some states have an "at-will" policy for employers right to terminate with any or no cause. So if you do disclose that information, and they find out, that could be their cause to let you go, but you won't be charged with criminal offenses or a contract breach.