Episode 302: Tesla and Wage Discussions

We assume Tesla must have an HR department, but we’re starting to suspect that the department just consists of one extremely haggard person constantly scrolling through Elon’s Twitter feed and saying “No no no, not again…”

Join Paul Edwards and Solution Center Advisor Kristen Hof as they discuss Elon Musk’s latest HR no-no: Telling employees they cannot discuss their wages with each other. If your business has a policy (either written or unwritten) telling employees not to discuss their salary, learn why that’s an exceptionally bad idea by listening to this week’s episode of What The Hell Just Happened.



Voice Over: You’re about to listen to another episode of What The Hell Just Happened?! Join Paul Edwards and his guests as they discuss and sometimes even solve some interesting HR problems. 

Paul: And… I’m gonna go off the rails sometimes and talk about whatever I want. 

Kristen: Hey, Paul. 

Paul: Hey, Kristen. How are you doing?

Kristen: Good. 

Paul: Good, So what are we going to talk about today in this episode of what the hell just happened in H.R.?

Kristen: Well, today I would like to talk about our good friend Tesla and some of their.

Paul: Oh, I have opinions

Kristen: Their recent things they had going on.

Paul: Yeah, they’ve gotten themselves in a lot of trouble. They’re not great at H.R..

Kristen: No, it turns out they are not. They’ve got some things to learn, it looks like.

Paul: Yeah, yeah, yeah.

Kristen: Yeah So what I was going to talk about today is they have a recent complaint through the NLRB.

Paul: Oh, yeah. Yeah.

Kristen: To do with it letting employees discuss wages and hiring and other employment actions that are going on within the company.

Paul: Right. So we know because we’re HR Nerds that the national labor relations board governs the national labor relations act. 

Kristen: Mm hmm. 

Paul: A quick history lesson for those out there who don’t read about this stuff and aren’t HR nerds. The act was put in place, I think, in the mid thirties, if i recall. A lot of times we as small employers don’t really pay much attention to these kinds of what we see as big federal laws.

Paul: This big federal law was put in place in order to pave the way for unions for the most part. So that’s another reason why we’re like, well, we don’t have a union in our little business or our big business. So why do we care about these rules? And the answer to that question is, we care because the rules apply to every single employer in the United States, whether you have one employee or whether you have thousands. And there are some rules tucked inside of this legislation, which goes above and beyond unionization.

Paul: And it kind of makes sense that it does. Right. 

Kristen: Mm hmm. 

Paul: Because in order to unionize, you have to have certain abilities or employees have to have the capabilities, maybe not abilities, best word capability to be able to discuss things like what.

Kristen: Like their wages and conditions of their employment right. So that is what is being protected by that. And it does come up a lot because, you know, I know I started out working at least in the mental space of you don’t talk about your wages.

Paul: Yes.

Kristen: That was what I thought, you know, going into the workforce because that was just what everyone around me did. But that’s not really the rule, is it?

Paul: It can’t be the rule. That’s the issue with it. And I think when we came into the world and when I say we, I mean CEDR, when we came into the world in 2006, I would say 90% of all handbooks that were sent to us for review had a policy in it that would basically say in some form or another, wages are private.

Paul: Anyone who discusses them will be fired for it or could be fired for it. 

Kristen: Yeah. 

Paul: And you can’t you can’t can’t do that.

Kristen: Right.

Paul: And, you know, I’ll just share without getting into too much detail, because we don’t we don’t want to share too much information about specific instances that happens with our members. But we have seen our members get on the wrong side of this law.

Kristen: Right.

Paul: Particularly, believe it or not, down in Texas, Texas, the National Labor Relations Board members who are down there are quite aggressive. They went after the state of Texas Dental Association. Oh. And gosh, I could just go on and on and on about this. I mean, it’s this crazy rule, this crazy law. But I know that ten years ago, I used to be married to an attorney who actually worked here.

Paul: I sat with her and some of her continuing education where national labor relations lawyers were educating at the CE continuing education courses around the states at all the different states for the for the attorneys for their CEs and telling them about the rule, how it applies, and actually saying to them, if you’ve got a case or you’ve got a client and you’re representing them and you’re representing them on something and you see this in an employee handbook. Know that you have another actionable thing there. They are actually breaking the law. And if you make us aware of it, we will investigate it and it will give you two fronts upon which you can attack.

Kristen: Wow. So just having the policy alone was enough. Okay

Paul: Yeah. This is one of those rare things where I say, if you make a mistake in your employee handbook, you can make a mistake in your employee handbook. If you never applied that mistake, then you wouldn’t have done anything unlawful. It could be used against you because it could show you don’t know what you’re doing.

Kristen: Right.

Paul: It certainly would be used against you. But in this case, you’re actually breaking the law. It’s actionable and they can come after you.

Kristen: Yeah. Because the policy itself is prohibiting a right that the employees have.

Paul: That the employees have. And so Tesla did this? No!

*Kristen and Paul laugh*

Kristen: No. They would never

Paul: Elon Musk went out publicly and told people that they better not be talking about this.

Kristen: Yeah. You know, it’s hard to believe. I know he has a great history 

*Kristen Laughs*

Paul: He’s not doing so good right now.

Kristen: No. Seems to be struggling a little bit. He needs some CEDR guidance.

Paul: I think he could use this. And this is crazy. Because I know his attitude is I have more money than God and I have tons of lawyers and I’ll do whatever I want to do and then I will get myself out of it. Or if I have to pay a fine, I’ll just pay the fine.

Kristen: Right, Just pay your way out.

Paul: I’ll pay my way out of it. And that works fantastic for billionaires

Kristen: Right, for a moment. 

Paul: For a moment, yeah. But for the rest of us out here who own businesses and who have employees, we look at just the threat of a lawsuit. And lawyers know that just the threat of the lawsuit is enough to make you want to pay it because it’s well, if you fight it, it’s just going to suck the life out of you.

Kristen: Right, it’s just not worth it.

Paul: It’s just not it’s just well, all the time you spend fighting it, you can’t fight this, by the way. And this is one of those things. It’s in your own words, in your employee handbook, you can’t really fight it. 

Kristen: You put the nail in the coffin for yourself. 

Paul: Yeah. You’ve kind of handed them everything they need. They’re not going to back off. And then, look, the things that they make you do, if you get found guilty and by the way, they’re the judge, jury and the enforcer. So you don’t go into a court system. They have their own system by which it’s weird because I’m being sarcastic here forfor our one listener, it’s weird because they always find in their own favor.

Kristen: Right of course.

Paul: And so what I’ve seen them do is reinstate an employee who did something really awful, forcing the practice to offer to reinstate the employee . Practice had to hire an attorney. They paid their attorney. And this was like they were guilty. Like they’re not going to get out of it. I think they paid their attorney 40 or $50,000 because they tried to fight it at first.

Kristen: Right? Yeah. Just that initial cost

Paul: I mean, we’re all that way. I think we’re all a lot of us that way because they couldn’t believe it. And honestly, I can’t give the details, but I was a little surprised at the way this played out. And then they force the owner of the business and this is part of their process. This was unique to the force, the owner of the business, to meet with the employees in front of one of the representatives from the National Labor Relations Board and read a statement that he had broken the law, that it was not okay what he did, telling them what it was okay for them to do, and then alerting them that they had put a whole poster up in and said all the things that they did that they won’t do anymore. 

Kristen: Wow, so public shaming was added to the list.

Paul: A private shaming for the employees. And I just have to just give credit. I’ve seen this happen in two or three different instances. And one of the things I’ve also noticed is that the employees aren’t happy about it. 

Kristen: Right.

Paul: They don’t like seeing this happen. The one employee is thrilled right there. They’re happy about what they’ve done.

Paul: But the rest of the employees don’t think this is fair and don’t think it’s the right thing to do. And I don’t disagree nonetheless, here we are, The rules are the rules. This is a law. And we have to comply with it and not break it. And I mean, you’ve asked me a question and I’m like, I’m monopolizing this but I do like talking about the subject. I think the last thing that I would add and if you have anything else you want to add, please do it changes the board changes politically. Every single time the presidency changes, there’s an opportunity for the president to flip over this board and certain seats in it.

Kristen: Oh, that’s interesting.

Paul: So prior to when President Obama came in for the prior 12 years before that, the board was active and they would go after people. They were pretty active and they were just starting to rear their head quite a bit against small businesses. They just didn’t used to go after small businesses. And then when the Obama administration came in, some folks got on the board that were very, very employee friendly and very much union friendly, and it swung way too far way too far in favor of the employee to the point where they had set an opinion and they had said that an employee can use any language they want to to express their frustration with their working conditions. And so if they walked into a supervisor’s office and started dropping F-bombs and S-bombs, you could not turn around and fire them for the language that they used. 

Kristen: Interesting 

Paul: That’s how far in one direction it  went. There were many other things that made it so broad that it had us all fearful of them, and rightfully so.

Paul: Because they were out lecturing and teaching attorneys and they were kind of like, Hey, guys, we got a new tool here, let’s use it. And of course, all the attorneys are like, Heck yeah, I love this, they just see another 15 grand.

Kristen: So the way they go could really change on a dime like it could just because there’s been a trend currently of them not really pursuing something that doesn’t mean that that’s not going to be the case.

Paul: Yeah, that’s exactly right. You can’t depend on flying under the radar like you shouldn’t be depending on that to get yourself through or not being discovered or that you’re doing something wrong. You should just try from the base to get it right. And this is one of getting it rights is that you cannot restrict their ability to discuss these things and then it broadens so thats something you can share.

Paul: It’s not just sitting in a break room somewhere

Kristen: Right

Paul: Where, where else where else?

Kristen: Well, they can talk about it anywhere, they can talk about it on social media if they want.

Paul: Yeah

Kristen: That comes up a lot.

Paul: Our damn social media policy can’t be overbroad or seen to squash that sort of stuff. So we had to put in language there.

Kristen: Mm. Yeah. And you know what I found interesting about this claim too, is that it dealt with wage discussions, but also discussions of who they were hiring and other employment actions that were going on and I could definitely see an argument being made of, well, I don’t want my employees talking about this other employee’s, you know, corrective action or whatever was going on with them.

Kristen: So, you know, how should we address that?

Paul: Yeah, I mean, that’s the question, right? That’s like how do you, what approaches can you take? What can you say? What can’t you say? For the listeners who are out there, I just want you to know, it sounds like we’re telling you, well, here’s the one thing we’re telling them. What’s the one thing we’re telling them?

Kristen: That their employees are allowed to talk about their wages and their conditions. Do not stop that.

Paul: So we are making that clear. Yeah. Do not do not stop that and don’t try to get cute around it either. Don’t try another avenue. There’s no other way around that. 

Kristen: Right, No gossiping policies can be very problematic because they definitely give the impression that these sorts of things are being controlled and they’re not allowed to be.

Paul: And so we had that, I think when we first did our handbook and it was pointed out that we couldn’t have that. So that had to come, you know. The one thing I want everybody to know is we’re not saying you can’t, you can’t take action in some way, shape or form to, I don’t want to say, I don’t want to use the word control.

Kristen: Mmhm

Paul: Well, generally, when someone’s participating in this kind of activity, they’re participating in all kinds of other activities that are not so good for work or for them or for the job or whatever it is. And those are the things that we can focus on. And we just can’t focus on the stuff when they’re talking about wages.

Paul: Now, this comes up in a lot of different circumstances. So you just can’t take what I’m saying. You can take this one thing from us. Again, I’ve said it like five times, do not have a policy that forbids people from discussing benefits, wages or working conditions. You just don’t do that. Everybody can take that to heart. Even if you’re a private employer, you’re non-unionized, you have to follow this rule. But this is one of those circumstances where I think we deal a lot with a lot of problems that brush up against the National Labor Relations Act. And we just have learned how to keep that in its own little place over there and be focused on the issue that’s at hand. 

Kristen: Yeah, keep the performance issues separate from the issues. If there’s a gossiping issue, then there’s probably more than just

Paul: there’s a way we can get specific about that. 

Kristen: Exactly.

Paul: We don’t call it gossip and there’s lots of things we can say to an employee who is participating in gossip-like activity. We can narrow it down to nonprofessional communication. And why did you just talk about this person’s whatever?

Kristen: Right.

Paul: They’re upset now.

Kristen: Right now what about a situation where somebody takes the information from someone else? I’ve taken your pay stub and I have looked at it.

Paul: I’ve gone somewhere where I’m not authorized to witness this information and now I want to talk about it. So I can’t fire you for talking about it but I can get on you for going and getting the information in a way that you did not have authorization to get.So that was a very good way to end this.

Paul: Right? That’s a specific thing. No I’m not firing you for talking about it.

Kristen: Right

Paul: Yes. I am firing you for going into my office, of which you never go into and opening up my computer and for it being open to our payroll and you seeing stuff and then you talking about it. That’s going to get you in trouble.

Kristen: Exactly. Yeah. If you’re having the conversation together and you’re both involved in it, then you have every right to have that conversation. But you can’t go snatching other people’s information without their permission.

Paul: You can’t go snooping and take things you aren’t supposed to have 

Kristen: Yeah. 

Paul: OK. You know, I love that we’re talking about the National Labor Relations Act. It’s just a super nerdy thing, but it applies. And it’s something that people should know, you should be fearful, you should avoid and stay away from this thing. As a manager if you’re listening to the podcast right now, just look into this a little bit more just, you know, get a little more education or look at the education that we provide.

Paul: We provide a couple of really good articles on this at the CEDR website.

Kristen: We certainly do.

Paul: Right. Thanks for that. That was awesome.

Kristen: Yeah. Thank you.

Voice Over: Thanks for joining us for this week’s episode of What The Hell Just Happened? do Paul a favor; share this with your network. If you have an HR issue or a question, you’d like us to discuss on this show, send it to podcast@WTHjusthappened.com. For more HR advice and insights from Paul and his team of experts, you can also join the private Facebook group, HR Base Camp, or visit HRbasecamp.com. Make sure you tune in next week. And remember: better workplaces make better lives. 


Feb 7, 2023

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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