The National Labor Relations Board recently signaled that it will follow acting general counsel Lafe Solomon’s directives aimed at invalidating broad social media policies. Costco Wholesale Corporation instituted a social media policy in its employee handbook prohibiting employees from posting negative messages about the company on social media websites. Specifically, the policy stated:

“Employees must be aware that statements posted electronically . . . 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.”

The United Food and Commercial Workers Union filed an administrative charge against Costco, alleging that the policy violated National Labor Relations Act (“NLRA”) Section 8(a)(1). While an Administrative Law Judge (“ALJ”) found that employees would not reasonably construe this policy as regulating and inhibiting protected conduct under the NLRA, the National Labor Relations Board (“NLRB”) disagreed.

The NLRB reversed the ALJ decision, finding that Costco’s “maintenance of the [policy] has a reasonable tendency to inhibit employees’ protected activity and, as such, violates Section 8(a)(1).” Section 7 of the NLRA grants employees the rights to form and join unions, to collectively bargain and engage in other concerted activities for the purpose of collective bargaining. NLRA Section 8(a)(1) prohibits employers from violating those rights granted to employees by Section 7.

The NLRB noted that Costco’s policy did not explicitly reference protected Section 7 activity. However, because the policy prohibited any statements that “damage the Company,” it restricted certain Section 7 activity in violation of the NLRA. The NLRB held that if the policy contained some accompanying language that limited its application to certain prohibited actions that fall outside of Section 8(a)(1)’s protection, the policy would have been upheld. The extremely broad coverage of the social media restriction, however, inhibited Section 7 in violation of the NLRA.

This decision follows recent guidance from NLRB acting general counsel Lafe Solomon regarding the scope of social media policies. The prior guidance made clear that social media policies that reasonably inhibit Section 7 were not permissible under the NLRA. The NLRB’s view in this decision is consistent with the issued guidance.

Employers should consider how this decision and recent guidance from the acting general counsel impact their social media policies. Most importantly, employers should ensure that managers understand the social media policies and the type of activity protected under the NLRA so that employment decisions are taken on legitimate, defensible bases.