In September, the National Labor Relations Board issued its first Board-level decision on a Facebook-related termination. In Karl Knauz Motors, Inc., the Board found that the employer did not violate the National Labor Relations Act ("Act") when it terminated an employee for his Facebook commentary on a car accident at an adjacent, employer-owned dealership. The Board affirmed the administrative law judge's decision (see October 2011 FEB) in which the ALJ observed that the posting was done "apparently as a lark, without any discussion with any other employee …, and had no connection to any of the employees' terms and conditions of employment."

Of particular concern to employers, however, is the Board's agreement that the employer's "courtesy" rule – which required employees be courteous, polite and friendly to customers, vendors and suppliers [and] fellow employees" and disallowed "disrespectful … or any other language which injures the image or reputation of the [employer]" – violated the Act. A two-member majority of the Board concluded that an employee would reasonably understand the rule to prohibit communications about terms and conditions of employment that are otherwise protected by the Act. Dissenting, Member Hayes took issue with the majority's ruling, observing that read in context the rule was "nothing more than a common-sense behavioral guideline."

The Karl Knauz, Inc. decision falls in line with the Board's ongoing intense scrutiny on employer policies, as most recently summarized in its General Counsel's memorandum (see June 2012 FEB). Indeed, in the same month, the Board and an ALJ issued several other decisions invalidating employer policies as impermissibly broad due to their purported potential to chill Act-protected concerted activity:

  • In Costco Wholesale Corporation, the Board issued its first decision on an employer social media policy. The policy prohibited employees from electronically posting "statements … (such as [to] online message boards or discussion groups) that damage the Company, defame any individual or damage any person's reputation" on the pain of discipline and possible termination. The Board invalidated the policy, finding it "clearly encompasses concerted communications protecting [Costco's] treatment of its employees" and nothing in the rule "even arguably suggests that protected communications are excluded."
  • In Flex Frac Logistics, LLC, the Board considered a confidentiality rule that prohibited employees from disclosing confidential "financial information, including costs" and "personnel information and documents" outside the company. A two-member majority found the policy to chill Act-protected conduct, specifically citing communications with union representatives who would be "outside the company." Dissenting, Member Hayes recognized the legitimate business purpose of the rule to ensure the company's ability to competitively bid for contracts by keeping its cost structure from being disclosed to third parties. He observed: "I fail to see anything in the record to indicate why [employees] would reasonably be inclined to so contort the context and stated purpose of the confidentiality rule as to preclude the discussion of wages."
  • In EchoStar Technologies, L.L.C., an ALJ invalidated several policies, including a social media rule that prohibited employees, in their personal social media activities, from (a) "disparaging" EchoStar, its employees and certain other individuals and entities affiliated with EchoStar or (b) engaging in such activities on "EchoStar resources and/or on company time" absent company authorization. It rejected EchoStar's attempt to invoke a savings clause, commenting that "a general clause or other language asserting that a document should be applied and interpreted in such a manner that it is legal[ly] proper does not save an otherwise invalid rule under the Act."

The final word on how broadly employer policies will ultimately be interpreted in assessing whether they chill conduct protected by the Act rests with the courts – guidance much awaited by employers. Until then, with the Board largely following the aggressive course set by its General Counsel, employers should partner with counsel in crafting policies that carefully balance legal compliance, risk, and business needs.