Employee use of social media – and employer regulation of that use – continues to draw a virtually unprecedented level of attention at the National Labor Relations Board. The Board's Acting General Counsel issued three reports within the last 12 months on this topic (in June 2012, January 2012, and August 2011), in which he outlined his view of how the National Labor Relations Act applies to employee postings and employer social media policies, and attempted to anticipate the Board’s position on those issues. Until now, however, the Board itself had not spoken.

On September 7, 2012, in Costco Wholesale Corp., the NLRB invalidated an employer’s electronic posting rule that prohibited employees from making statements that “damage the Company … or damage any person’s reputation.” The Board found the policy overly broad, concluding that it reasonably could be interpreted to "chill" employee exercise of the right to engage in "protected, concerted activity" (such as the right to protest working conditions or address other work-related issues), a right guaranteed to union and non- union workers alike through the National Labor Relations Act. 

The Board’s decision in Costco applies much of the legal reasoning outlined in the three GC reports and suggests that the GC accurately predicted the Board's approach to this subject. Like the reports, Costco uses case law developed outside the social media context in the form of more traditional workplace rules and applies those principles to electronic forms of communication. Much to the chagrin of many in the business community, Costco (again like the GC reports) does not develop any social media-specific guidance or appear to recognize the very different potential impact on an employer's operations of a disparaging statement made on the Internet as opposed to one made at the workplace water cooler.  

In light of the decision, employers can expect the Board to be critical of social media policies that contain broad prohibitions on actions or statements about workplace concerns that do not include examples of the postings the employer may permissibly target. Such examples include defamatory or sexually harassing comments, or the disclosure of an employer's trade secrets.