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Why Obama’s Executive Order Against Pay Secrecy Matters

Topics: Current Events

On April 8, 2014, President Obama signed the Non-Retaliation for Disclosure of Compensation Information into law. This executive order prohibits federal contractors from retaliating against workers who discuss their wages and salaries, but even if you don’t work for the government, it’s part of a trend that could affect your working life.

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The purpose of the executive order is to prevent federal contractors from paying some workers less than others, based on factors not related to their job performance, skills, or experience. For example, the law makes it harder for government employers to discriminate against female employees by offering them a lower salary than male employees.

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Not everyone thinks the law is necessary, however.

“Some say we need another new federal statute to protect women from wage discrimination,” writes Gerald D. Skoning at The Palm Beach Post. “They claim that the existing panoply of federal and state laws prohibiting pay discrimination on the basis of gender are insufficient. To the contrary, vigorous enforcement of existing laws, not enactment of more, wholly unnecessary laws, is the answer to existing gender-based wage disparities.”

And that’s not the only criticism of the executive order. A memorandum from Kirsten Kukowski, RNC National Press Secretary argues that employees freely discussing pay hinders employers’ ability to offer merit-based compensation. However, the Equal Pay Act of 1963 clarifies employers’ rights to offer different pay based on numerous reasons, including job performance, experience, and more.

Lilly Ledbetter

If an employer is paying workers based upon years of experience, productivity, and job performance, then they have nothing to hide. They should not fear employee conversations about their compensation. On the contrary, if a worker gets a raise for doing something well, it may act as a catalyst for more workers to do their very best at their jobs.

As we said earlier, one way employers get away with paying women less than men for the same work is by prohibiting workers from discussing their pay with each other. If a woman does not know she is making less than her male counterparts for the same work, she is unlikely to complain about it.

The devastating and inspiring case of Lilly Ledbetter illustrates how older laws protecting women from workplace discrimination are not enough. Lilly Ledbetter, a former employee of Goodyear Tire & Rubber Co., was paid up to 40 percent less than her male counterparts for almost 20 years. She sued when she first discovered this discrepancy, 19 years after her first day at Goodyear. Ledbetter lost at the Supreme Court level because she didn’t file suit within 180 days of her first paycheck.

The first law President Obama signed when he took office was the Lilly Ledbetter Fair Pay Act of 2009, which amended the Civil Rights Act of 1964 to change the definition of the statute of limitations on equal-pay lawsuits. Thanks to the Act, workers who feel they were discriminate against based on race, religion, sex, or national origin now have 180 days from the each instance of discrimination to file suit — for example, the last time they were issued an unfair paycheck, not their date of hire.

Obama’s executive order continues this trend of protecting workers from discrimination. Hopefully, this move toward pay transparency will prevent more cases like Lilly Ledbetter’s.

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Male Matters

Six months after I, a man, was hired by a finance company in the mid-1960s, a man was hired to do the exact same thing that I did — at a higher salary than what mine was at the time.  The company had a policy of salary confidentiality. (Workers discuss their salaries despite the policy.) The policy’s purpose was to enable employers to woo from other companies prospective employees who the company thought would be star performers.  That went on… Read more »

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