Who Benefits From Keeping Salaries Secret?

Jan. 16, 2008— -- The average American office is a place filled with secrets. None of them is more guarded -- or arouses more fascination -- than other people's salaries.

Who wouldn't love to know what a colleague is worth to his or her employer?

Asking about, or revealing, a salary is an entrenched social taboo. But now it's time to bring paychecks out of hiding, financial expert Suze Orman says.

"I think salaries should be posted," Orman said. "Every salary. From the highest down to the lowest. Because then somebody knows what they're worth."

Finding out that someone doing the same job is making more money can be catastrophic for office morale. But Orman says it's the employer who benefits from salary secrecy.

"They can pay you a lot less and pay somebody else a lot more if nobody knows who's getting paid what," she said.

Orman, whose latest book "2009 Action Plan" tops the New York Times' Bestseller's list, says that for generations, keeping salaries secret has made it easier for corporations to protect their bottom line and to discriminate, particularly against women.

Former Goodyear Tire employee Lilly Ledbetter says she's a perfect example of that.

On her first day of work in 1979, she says, she was told never to discuss her salary with anyone. And, for almost 20 years, she never heard anyone at the plant discuss their pay.

Although she suspected she might have been making less than her male co-workers, it wasn't until someone left her an anonymous note that Ledbetter knew for sure. The note listed four people's names and their salaries, and showed that she was earning up to 40 percent less than her male colleagues with the same job.

"I was initially humiliated," Ledbetter said. "I felt degraded. I felt like I wanted to hide and I did. I went into the ladies' lounge and sort of regrouped and got my composure."

Soon after her discovery in 1998, Ledbetter sued Goodyear, which denied discriminating and told ABC News it has no policy prohibiting employees from sharing information about their salaries.

In a case that went all the way to the Supreme Court, Ledbetter lost, on a technicality. In order to have standing to sue, she would have had to bring her case within 180 days of the decision to pay her less than the men, although it wasn't until years later that she received the note revealing her coworkers' salaries.

Ledbetter's case led to the The Lilly Ledbetter Fair Pay Act, a bill has been re-introduced to Cogress after initially failing to pass in 2007. If the bill is passed, the act would change the law to start a new 180-day statute of limitations with each paycheck.