NLRB Invalidates Costco's Social Media Policy
Time 2 Minute Read

On September 7, 2012, the National Labor Relations Board invalidated Costco Wholesale Corp.’s policy of prohibiting employee electronic posts in its first decision involving an employer’s social media policy.  In Costco Wholesale Corporation and UFCW Local 371, Case No. 3A-CA-012421, the Board held, among other things, that Costco’s rule prohibiting employees from posting statements electronically that “damage the Company, defame any individual or damage any person’s reputation” was overly broad.  The Board reasoned that the policy language contained no restrictions on its application and, thus, clearly encompassed protected concerted communications, such as speech that is critical of Costco or its agents.  Accordingly, the rule had a tendency to chill employees’ protected activity in violation of Section 8(a)(1) of the National Labor Relations Act, which makes it an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of their rights guaranteed by Section 7.

This decision applies much of the legal reasoning articulated in three prior guidance memoranda on the Act’s application to social media policies issued by the Board’s Acting General Counsel, Lafe Solomon.  However, the decision does not include any specific guidance as to how employers can craft a social media policy that will survive scrutiny.  Nonetheless, employers can expect the Board to be skeptical of policies that contain blanket prohibitions on statements about the workplace that do not include direct examples of the types of electronic communications that are prohibited, such as sexually harassing comments or the disclosure of trade secrets.  The Board also hinted that language stating that the policy did not apply to protected activity might also have saved it if from that language an employee could not “reasonably construe [the policy] to prohibit Section 7 activity.”  However, in light of Solomon’s prior guidance memoranda, a blanket savings clause that states the policy does not apply to any Section 7 activity would likely not suffice, and instead the policy would have to include specific examples of the types of activity outside its scope.


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