A three member panel for the National Labor Relations Board (“NLRB” or “Board”) has issued its first decision concerning the validity of an employer’s social media policy. The Board found Costco Wholesale Corporation’s electronic posting rules were overly broad and in violation of the National Labor Relations Act (“NLRA” or “Act”), due to the potential chilling effect on employees’ exercise of employees’ rights under the Act. Costco Wholesale Corporation, 358 NLRB No. 106.

At issue was Costco’s policy 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 Board held this policy was overbroad and violated the NLRA.

In so holding, the Board found that employees would reasonably construe this policy as one that prohibits protected concerted activity, protected by Section 7 of the NLRA. The Board reasoned that Costco’s policy covers concerted communications protesting the employer’s treatment of employees.

Further, the Board found Costco’s policy did not suggest that protected communications are excluded. The Board’s reliance on the fact that Costco did not include some type of disclaimer allowing protected concerted activity may leave the door open for a social media policy with such a disclaimer to pass muster before the Board. However, the Board did not provide any specific guidance how specific or detailed such a disclaimer should be, and that issue is likely to be addressed in future Board rulings.

This is the first Board decision regarding an employer’s social media policy and decisions in similar cases are expected as the law concerning social media usage and employers’ rights to regulate such usage develops. This decision follows the issuance of several advice and counsel reports by the NLRB’s Acting General Counsel, Lafe Soloman, regarding cases addressing social media and employer social media policies. (Click here to view our recent client briefings regarding the Acting General Counsel’s reports.) The NLRB’s holding in Costco Wholesale is closely aligned with the Acting General Counsel’s reports prohibiting generalized prohibitions on what employees can say online and reveals that this Board will take a broad view of what constitutes protected employee speech in the social media universe.

Given the evolving nature of the law with respect to social media issues, specific policies and questions should be reviewed with counsel.