Coming Clean on Worker Salaries

By LISA TAKEUCHI CULLEN

I have no clue what my colleagues make. I suspect some earn more than I do and others take home less. Like most American workers, I consider my salary my own damn business. Turns out that could be a big mistake--at least in the opinion of a petite grandmother with an Alabama drawl.

When Lilly Ledbetter began working at Goodyear Tire & Rubber Co. in 1979, she too knew nothing of her peers' paychecks. She was hired as a supervisor at its Birmingham, Ala., tire plant, doing all the work her male colleagues did. She says she hauled tires off machinery for inspection, rotated through every division and pulled many hours of overtime. She helped launch a new plant that made truck tires. Throughout, she says she earned bonuses and plaudits for solid work.

In 1998 someone placed a memo in her mailbox that listed her base salary--about $44,000 a year--and that of three male colleagues of equal if not lesser tenure and title. They earned from $53,000 to $62,000. "I was floored," says Ledbetter, 70. "I just didn't know."

Ledbetter sued her employer, and a federal jury awarded her $3.8 million in damages in 2003, later reduced to $300,000 by a judge. But Goodyear appealed all the way to the Supreme Court. The employer's case: While the Civil Rights Act forbade pay discrimination on the basis of race, gender or religion, the act held that employees must lodge a formal complaint within 180 days of the initial discriminatory paycheck. According to the law, Ledbetter needed to have sued within six months of her being hired--never mind that it took her nearly 20 years to learn she earned less. In the 2006 Supreme Court case Ledbetter v. Goodyear, the court agreed with the tiremaker, leaving Ledbetter with no award at all. Oh, but she did receive a $3,165 bill from Goodyear for "court costs."

Ledbetter's life since then has been a long campaign to change the law. The U.S. House approved a bill in 2007 that would hold employers accountable for the most recent discriminatory paycheck, not just the first one. But the Ledbetter Fair Pay Act failed to gain a filibuster-proof majority in the Senate. (Hillary Clinton and Barack Obama support the bill; John McCain is against it.) The National Women's Law Center, which is supporting Ledbetter, says changing the law would help close the gender wage gap; on average, women earn 77 to every dollar earned by men.

I've got another idea. What if employers made all employee salaries known? If you think about it, who is served by all the secrecy? Not you. It might irk you to learn that the junior analyst in the next cube really can afford his Bora Bora honeymoon--but that's all the more ammunition to gun for a raise. Transparency even benefits management, says Dave Cervone, a compensation expert at Challenger, Gray & Christmas. When he posted the staff salaries at a Chicago investment bank, he found that workers liked knowing where they stood. "It took away the mystery so they could focus on their work," he says. So show me your pay stub, and I'll show you mine.