NLRB Issues First Social Media Decision Striking Down Costco's Employment Policies

On September 7, 2012, the National Labor Relations Board (the “Board”) issued its first decision regarding an employer’s social media policy. In Costco Wholesale Corp., 358 NLRB No. 106 (2012), the Board held that Costco violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by maintaining a policy prohibiting employees from electronically posting statements that “damage the Company, defame any individual or damage any person’s
reputation[.]”

The Board held that the relevant portion of Costco’s Electronic Communications and Technology Policy was overly broad because employees could reasonably construe the policy as one that prohibits employees from exercising their rights under the NLRA. The Board found that the broad prohibitions of the policy clearly and unlawfully encompass protected concerted communications protesting the employer’s treatment of its employees. The Board noted that “there is nothing in the rule that even arguably suggests that protected communications are excluded from the broad parameters of the rule.”

The Board also struck down Costco’s policies that stated:

“[U]nauthorized posting, distribution, removal or alteration of any material on Company property” is prohibited;
Employees are prohibited from discussing “private matters of members and other employees . . . includ[ing] topics such as, but not limited to, sick calls, leave of absences, FMLA call-outs, ADA accommodations, workers’ compensation injuries, personal health information, etc.”
“Sensitive information such as membership, payroll, confidential financial, credit card numbers, social security numbers or employee personal health information may not be shared, transmitted, or stored for personal or public use without prior management approval,” and
Employees are prohibited from sharing “confidential” information such as employees’ names, addresses, telephone numbers, and email address.

The Board held that the above policies unlawfully restricted or could be reasonably construed to restrict employees from exercising their rights under the NLRA.

Although the Board struck down many of Costco’s policies, it did uphold two policies that prohibited employees from “[l]eaving Company premises during working shift without permission of management” and requiring employees to use “appropriate business decorum” in communicating with others. With respect to the policy prohibiting employees from leaving company premises during working shifts, the Board concluded that the policy would be reasonably understood by employees as pertaining to employees leaving their posts without first seeking permission from management. The Board rejected the argument that the rule “could” be construed to inhibit the employees’ rights to engage in protected activity (i.e., strike). In so holding, the Board noted that the policy did not include a reference to any term that would reasonably be construed as similar to the term strike or “walk out.” With respect to the second policy, the Board concluded that employers are entitled to establish rules to maintain a civil workplace and that a reasonable employee would view such policies as supporting that proposition, and would not view the rule as proscribing the employee’s NLRA rights.

Although this is the first Board decision regarding an employer’s social media policy, the decision serves as a reminder to employers to review their policies and procedures to ensure compliance with the ever-changing interpretations of the NLRA. If you have any questions about these issues, please contact your employment counsel at Smith, Gambrell, & Russell, LLP.