On September 7, 2012, the National Labor Relations Board (NLRB) issued its first opinion invalidating an employer’s electronic posting rules in Costco Wholesale Corp. The topic of social media has received almost unprecedented attention by the NLRB, as identified in three reports issued by Acting General Counsel Lafe Solomon in the past 12 months, with the most recent report issued on May 30, 2012. Although the Costco decision’s legal reasoning is consistent with the Acting General Counsel’s prior guidance, the difference is this guidance now has teeth.

Specifically, a rule that prohibits employees from making statements that “damage the Company… or damage any person’s reputation” is overly broad and invalid. In Costco, the NLRB found that the broad language could reasonably be interpreted to “chill the exercise [of an employee’s] Section 7 right” to engage in “protected, concerted activity” such as coming together to address work-related conditions.

Unfortunately, much like the NLRB’s guidance on social media thus far, the decision fails to outline acceptable methods of deterring employees from potentially illegal and damaging public statements. Further, there is no discussion of the potential impact of this decision on the work environment as disparaging comments written on Facebook or Twitter can have a very different and much broader effect than comments made by the water cooler.

As a result of the decision, employers should review their own electronic posting or social media policies to determine whether they too can be viewed as overly broad. Those that prohibit a wide range of conduct such as a general statement “prohibiting disclosure of the company’s trade secrets” without providing specific examples will likely be viewed as violating the National Labor Relations Act.