In its first ruling on the issue, a three member panel of the National Labor Relations Board (the NLRB or Board) has invalidated a social media policy at Costco's Milford, CT facility because it believes it is overbroad and violates employees' rights under Section 7 of the National Labor Relations Act (NLRA) to engage in protected concerted activity. The Board also invalidated a broad rule that prohibits the distribution of unauthorized material and the discussion of confidential information among employees. Costco Wholesale Corporation, 34-CA-012421 (September 7, 2012).

Protected Concerted Activity

Section 7 of the NLRA gives union and non-union employees the right to engage in protected concerted activity. Section 8(a)(1) of the Act makes it an unfair labor practice for an employer to interfere with Section 7 rights.

According to the Board's web page on the topic, concerted activity generally requires "two or more employees acting together to improve wages or working conditions, but the action of a single employee may be considered concerted if he or she involves co-workers before acting, or acts on behalf of others."

The current Board has adopted an expansive view of protected concerted activity.

The Social Media Policy

According to the Board's decision, Section 11.9 of Costco's employee handbook states:

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.

The administrative law judge (the ALJ) found that employees would not reasonably construe this rule as regulating, and thereby inhibiting, Section 7 conduct. The Board overruled the ALJ:

Here, the Respondent's rule does not explicitly reference Section 7 activity. However, by its terms, the broad prohibition against making statements that "damage the Company, defame any individual or damage any person's reputation" clearly encompasses concerted communications protesting the Respondent's treatment of its employees. Indeed, there is nothing in the rule that even arguably suggests that protected communications are excluded from the broad parameters of the rule. In these circumstances, employees would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications (i.e., those that are critical of the Respondent or its agents).

Without providing any specific guidance, the Board suggested that if the policy contained language that would tend to restrict it from applying to Section 7 rights, it would be valid.

The Blanket Policy Prohibiting Distribution of Unauthorized Materials, Discussing Private Matters, and Exchanging Confidential Information

The Board upheld the ALJ's determination that the following blanket policy violated Section 8(a)(1) of the NLRA:

  1. "unauthorized posting, distribution, removal or alteration of any material on Company property" is prohibited;
  2. employees are prohibited from discussing "private matters of members and other employees . . . includ[ing] topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accommodations, workers' compensation injuries, personal health information, etc.";
  3. "(s)ensitive information such as membership, payroll, confidential financial, credit card numbers, social security number or employee personal health information may not be shared, transmitted, or stored for personal or public use without prior management approval"; and
  4. employees are prohibited from sharing "confidential" information such as employees' names, addresses, telephone numbers, and email addresses.

According to the ALJ, this policy explicitly restricts Section 7 activity and employees would reasonably construe the language to prohibit Section 7 activity.

The Policy Prohibiting Employees from Leaving the Premises

Finally, Section 11.3 of Costco's handbook lists a number of actions that may lead to an employee's immediate discharge. One such action is "(l)eaving Company premises during working shift without permission of management." The ALJ found that the maintenance of this rule violated Section 8(a)(1) because it "inhibits the employees' rights to engage in Section 7 activity (i.e., strike)." The Board disagreed, reasoning that the policy "does not include a reference to any term that would reasonably be construed as similar to the term strike or "walk out." The Board concluded that "in these circumstances, the reference to leaving the premises during worktime would be reasonably understood as pertaining to employees leaving their posts (for reasons unrelated to concerted activity) without first seeking permission."

Conclusions

Employers must adopt and enforce social media and other workplace policies very carefully to make sure they do not explicitly interfere with Section 7 rights. Moreover, if a policy arguably chills an employee's right to engage in some form of protected concerted activity, the employer should insert some form of disclaimer to make it clear that it does not prohibit such conduct. It is still unclear how specific or detailed such a disclaimer should be, but that issue is likely to be addressed in future Board rulings.