As a startup, is it legal to put a clause in the employment contract saying that the employee cannot disclose his/her salary to other employees?

Under federal labor law, employees can talk about their salaries and employers are usually not allowed to have policies related to pay secrecy even if they don’t do business with the federal government. I can understand your concern. It can create issues and if you choose to fire someone for discussing pay, you can get into legal hot water. Former President Barack Obama signed executive orders that addressed fair wages regardless of gender and retaliation related to pay secrecy: “Pay secrecy fosters discrimination and we should not tolerate it.”

According to the National Labor Relations Board, employers cannot forbid employees verbally or in writing from discussing their salaries or other job conditions among themselves. They consider it a “protected concerted activity.” And it doesn’t matter if they’re talking about it in the break room or on social media.

Yet, if this were discussed, you’d have to worry about morale. Morale is important. Ask yourself why your other employees may not be making what they should be making. Competitive salaries are important.

One thing you may consider past examining your pay scale and perks for all of your employees is to talk to an employment law attorney. This is the best way for you to determine how you should handle this situation and get your employment agreement reviewed. LawTrades is a legal marketplace and we provide affordable access to employment lawyers for businesses and employees. One feature we have is LawTrades Micro, which allows you to ask one of our attorneys a question and you’ll receive a customized answer within 48 hours for a low flat rate. Hope you check us out!