"Radical Transparency" is the mission of clothing company, Everlane. They want customers to know everything about how they make and price their clothing. Their about section of their website includes descriptions like this:
We believe our customers have a right to know how much their clothes cost to make. We reveal the true costs behind all of our products--from materials to labor to transportation--then offer them to you, minus the traditional retail markup.
It sounds fantastic, but some of their employees say that transparency is only for customers and not for employees, and, as such, they are forming a union. Citing poor pay and that while Everlane wants its clothes to last forever, they treat employees as disposable. It's not a pretty picture.
Everlane, of course, counters that there are downsides to unionization and Vice reports that Kelly McLaughlin, head of the People division at Everlane, sent emails regarding the union drive, pointing out these downsides, including lack of individual communication. (Vice points out, correctly, that all this can depend on the union contract.)
But, Everlane has another problem--and that is employees feel like management forbid them to talk about their salaries. This is an aspect of transparency that isn't radical--the National Labor Relations Act gives employees the right to talk about their working conditions with their coworkers--and working conditions include salary.
Employees claim that, at an all-hands meeting, Tara Shanahan, the VP of Retail, told the employees they were not allowed to discuss their wages. Everlane claims that it is a misrepresentation of what happened. A spokesperson said:
"In the all-hands meeting in August we told an employee that this was not the right setting to share wage information. We apologize if this made anyone feel uncomfortable, and employees are of course free to share wage information if they choose to."
This is a trap that many companies fall into. Salary secrecy is so ingrained in our culture that many people don't know that employees have the legal right to discuss it. But, that right doesn't mean you can demand the boss talk to you about salaries in general.
It's perfectly legal for the boss to say, "I'm not going to talk about salaries right now," but it's perfectly illegal to say, "you can't talk about salaries."
And managers need this training. An all-hands meeting probably isn't an appropriate place to address salary issues. Still, you must make it clear that you're not prohibiting employees from discussing salaries among themselves.
Of course, Everlane could have avoided this salary controversy if they extended their policy of radical transparency to salaries and benefits. If every employee could look up their coworkers' wages, there would be no problems in this area.
Salary transparency doesn't solve every problem, but it does make things clear. Just like most consumers don't understand that black box of product pricing, most employees don't know how salaries are determined. It can seem that managers are pulling numbers out of the air when smart companies are looking at market rates for every position.
Make sure you train your managers on how to respond to salary inquiries. You don't have to make salaries public to comply with the law, but you can't stop employees from discussing--or even discourage it. And, if employees want to complain about how they feel pressured to keep salaries secret, that's a concerted activity as well, and protected.
It will be interesting to see if Everlane's employees go ahead and unionize, something I'm sure Everlane management does not want. (It's rare management that wants unionization.) Perhaps a bit more internal radical transparency could prevent that.