Time To Re-Examine Your Social Media Policy

Costco's Violation of Social Media Policy

In what is likely to be the first of many rulings impacting the effect of social media policies, the National Labor Relations Board has invalidated a policy in Costco Wholesale Corp.'s national employee handbook, which generally banned employees from posting damaging or disparaging content on electronic message boards, finding that the policy was overbroad and constituted unfair labor practice under Section 8 of the National Labor Relations Act (NLRA). The policy at issue specifically stated "Employees should be aware that statements posted electronically (such as to online message boards or discussion groups) that damage the company, defame any individual or damage any person's reputation, or violate the policies outlined in the Costco Employee Agreement may be subject to discipline, up to and including termination of employment." The NLRB panel found that while it did not explicitly prohibit protected activity under the NLRA, the policy clearly encompassed protected communications, such as those protesting Costco's treatment of its employees, and therefore employees "would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications (i.e., those that are critical of the company or its agents)."

NLRA's Restrictions

Section (8)(a)(1) of the NLRA makes it an unfair labor practice for an employer to interfere with, restrain or coerce employees in the exercise of their rights guaranteed in Section 7 to engage in "other concerted activities for the purpose of collective bargaining or other mutual aid or protection," including the right to protest working conditions or address other work-related issues.

Key Learning Points

While the panel invalidated the discount shopping giant's policy, it did not do so based on any rules or guidance specific to social media policies (in fact, the opinion does not even mention the term "social media" at all) but rather by applying traditional analysis broadly defining the universe of protected employee speech to communications across electronic platforms. The decision indicates that the social media policies with generalized language prohibiting employees...