As previously reported, we have been closely following the National Labor Relation Board’s (NLRB) General Counsel’s advice memoranda on social media policies. Recently, the NLRB issued its first binding decision involving employees’ rights under a common social media policy. In Costco Wholesale Corp., the National Labor Relations Board ruled that Costco’s online communications policy violated employees’ Section 7 rights under the National Labor Relations Act (NLRA). The policy prohibits employees from posting statements “that damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.” 

The NLRB took issue with the breadth of the policy, finding that it “clearly encompasses concerted communications protesting [Costco’s] treatment of its employees.” The NLRB found that employees reading the policy would “reasonably conclude” that it prohibits them from engaging in protected communications, namely “those that are critical of [Costco] or its agents.” The NLRB also found problematic the absence of any accompanying language that would restrict its application, such as a statement that it does not apply to communications protected under Section 7 of the NLRA. For these reasons, it held that Costco’s policy had “a reasonable tendency to inhibit employees’ protected activity,” and therefore violated the NLRA.

The Costco ruling comes as no big surprise, as it is consistent with previous advice memoranda issued by the NLRB General Counsel on social media policies. The ruling is also further evidence of the NLRB’s aggressive review of general employment policies. In the past three months alone, the NLRB has found NLRA violations in seemingly innocent ,and generally accepted off-duty access and confidential internal investigation policies, and recent signs suggest that the NLRB has at-will employment policies in its sights as the next frontier for new-found violations of the NLRA.

For union and non-union employers, the NLRB’s Costco decision underscores (again) the importance of revisiting and developing a social media policy that is consistent with the NLRA. Indeed, now more than ever, all employers should continue to review and update all of their policies to ensure that they are specific, narrowly tailored to their business needs, and do not sweep so broadly so as to interfere with employee rights under federal labor law.