The National Labor Relations Board (NLRB) has issued its first decision on social media policies. The NLRB found that Costco Wholesale Club's electronic communications and technology policy violated the National Labor Relations Act (NLRA) because the language could chill Section 7 rights. This decision is consistent with prior Acting General Counsel (AGC) reports reviewing social media policy language, and confirms that employers who have not already done so must take action now to revise overly broad social media policies. The AGC's reports on social media cases can be accessed by clicking the dates below:

The policy at issue in the Costco case stated: "Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. 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."

While an Administrative Law Judge found the policy did not violate the NLRA, the NLRB disagreed. The NLRB said that the appropriate inquiry is whether the rule would reasonably tend to chill employees in the exercise of their Section 7 rights. Because it is rare for a rule to explicitly restrict Section 7 rights, "the violation is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights."

The NLRB found that Costco's policy could encompass protected concerted communications in its broad prohibition against making statements that "damage the Company, defame any individual or damage any person's reputation." The NLRB also said the policy failed to include an exception stating that protected communications are excluded from the policy.

The NLRB also held that this policy failed to include "accompanying language that would tend to restrict its application" to only egregious conduct, or conduct that was not considered protected concerted activity. This is in line with the AGC's May 2012 report which said that policy language requiring employees to be respectful and "fair and courteous" in social media postings was not overly broad if the policy provides examples of plainly egregious conduct so employees would not reasonably construe the policy to prohibit Section 7 conduct. The NLRB found that Costco's policy could lead "employees to reasonably assume that it pertains to — among other things — certain protected concerted activities, such as communications that are critical of the Respondent's treatment of its employees." The NLRB determined that Costco's maintenance of the policy "thus has a reasonable tendency to inhibit employees' protected activity."

The NLRB's opinion does not provide much detail on the analysis of social media policies and does not provide specific criteria for evaluating social media policies. Instead, it applies traditional principles to social media policies and found that broad prohibitions on communications inhibit employees' Section 7 rights.

Ultimately, the NLRB's decision comes as no surprise, given the prior AGC guidance. Social media policies should be narrowly written to ensure they do not run afoul of the NLRA. Now that the NLRB has weighed in on social media and communications policies, employers who have not already done so should revise their social media policies to make clear that employees may engage in protected concerted activity without penalty.