Seyfarth Shaw Labor & Employment attorneys Timothy Hale and Reema Kapur, and Litigation attorney Scott Schaefers wrote an article published in Law360 on May 1. The article discussed a recent decision in U.S. District Court for the Eastern District of Michigan which highlighted the risks associated with the exchange of wage information and demonstrated that how employers gather wage information can create liability risks.
The writers point out "the Court's ruling provides an important lesson for employers in connection with the setting of their employees' wages." They note, employers should resist the temptation to engage in wage information described in the decision, which included 1) through direct contacts by employees at the various hospitals, 2) at healthcare industry meetings and through healthcare industry organizations and 3) through third-party surveys that did not satisfy the safety zone requirements of the joint enforcement policy statements issued by the Department of Justice and the Federal Trade Commission. Instead, they should limit this information exchange to the "safety zone" within the DOJ and FTC guidelines.
This "safety zone" is limited to surveys that satisfy conditions including (i) the survey is managed by a third party (e.g., a purchaser, government agency, health care consultant, academic institution, or trade association); (ii) the information provided by survey participants is based on data more than 3 months old; and (iii) there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider’s data represents more than 25 percent on a weighted basis of that statistic, and any information disseminated is sufficiently aggregated such that it would not allow recipients to identify the compensation paid by any particular provider.