NLRB Rejects Costco’s Social Media Policy


NLRB Rejects Costco Social Media Policy–Sends a Message to Employers

On September 18, 2012, the National Labor Relations Board issued its first formal decision on an employer’s social media policy. The NLRB rejected the social media policy developed by retail giant Costco as overly broad and likely to have a “chilling effect” on employees’ rights under the National Labor Relations Act. This ruling indicates that the NLRB is following the lead of its general counsel who already has issued three public memos explaining how social media policies can interfere with employees’ rights to organize.

The NLRB found that Costco’s policy of prohibiting employees from posting statements online that could harm the reputation of the company was unlawful because it could prevent employees from engaging in protected discussions regarding the terms and conditions of their employment. The board also was critical of the fact that Costco’s policy did not contain any type of disclaimer stating that it was not intended to interfere with the employees’ rights to engage in activity protected by the National Labor Relations Act. However, the board’s opinion did not go so far as to suggest that such a disclaimer would have cured the other defects that it found in the policy. On a more positive note, the board accepted the provision of Costco’s policy that required employees to use appropriate business decorum in all of their communications. 

Just days after the Costco decision was issued, it was cited by an NLRB administrative law judge as the basis for striking down the social medial policy of telecommunications company Echostar Corp. Echostar’s policy prohibited employees from making disparaging or defamatory comments about the employer or its employees, officers, directors, customers, vendors, etc. Despite other language in the policy that stated the policy would be interpreted to comply with existing laws and urged employees to use “good judgment” and contact human resources with any questions, the administrative law judge found that the prohibition of “disparaging” comments was too broad and would tend to intrude on the rights of employees under the National Labor Relations Act.

Takeaway for Employers:

The Costco decision serves as a reminder to employers that social media policies must be carefully worded and narrowly tailored to protect the legitimate business interests of the employer, such as confidentiality and security, without discouraging employees from engaging in protected activities. Due to the recent NLRB activity in this area, employers should review existing social media policies and consult with labor and employment counsel to revise those policies as necessary to comply with the most recent NLRB guidance.

If you have questions regarding your company’s social media policies, contact Glenn Israel (207 228-7291, in our Portland, Maine office or Karen Aframe (603 623-8700, in our Manchester, NH office.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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